Knight Creates Board-Level Risk Committee
October 17, 2012
To help prevent future errors like the $457.6 billion technical debacle on that date, the company Tuesday created a risk management committee “at the board level,’’ chief executive Tom Joyce said.
That follows the naming managing director Brian Strauss as the firm’s Chief Risk Officer, on September 20.
The company at that time also put its chief financial officer, Steven Bisgay, in charge of technology and operations, naming him chief operating officer.
Steven Sadoff, who had been global head of operations, services and technology and had overseen the buildout of Knight’s trading floor technology and communications infrastructure, was put in charge of the company’s correspondent clearing, prime brokerage and futures businesses.
The firm also retained IBM to review its systems. That review is expected to be completed “by Halloween,” Joyce said at a Security Traders Association conference in Washington, D.C., last month.
Wednesday, Joyce called the mistake a “simple human error” and a “breakdown in the software installation process.” The company had just put in new code, in preparation for the launch on that day of a new Retail Liquidity Program being operated by the New York Stock Exchange.
Joyce said Knight’s technology staff is creating “new processes for verifying installation” of new code and putting in place controls on outbound orders.
"We need to re-establish our reputation for operational excellence," Joyce said.
The company is also searching for a new chief technology officer. But Joyce named no candidates.