Knight says power back at its Jersey City headquarters


Knight Capital Group said on Thursday it was processing stock orders as usual and that its regular power supply had been restored a day after a backup power generator went down, forcing the brokerage to temporarily stop accepting client stock orders.

The Jersey City, New Jersey-based company said in a note to clients sent at 4:20 p.m. its regular utility power was back on, following several days running on backup power after Sandy, the massive storm that slammed into the U.S. East Coast on Monday, left millions in the New York metro area in the dark.

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Jersey City is across the Hudson River from lower Manhattan, and is the home to several financial services firms.

On Wednesday, a backup generator at Knight went down just before noon due to low fuel levels, according to an internal memo seen by Reuters. The company's critical trading systems then switched to battery power, which continued until the generators were restored at around 2 p.m., the memo said.

"Out of an abundance of caution and to protect our clients, a decision was made to instruct clients to route away," the memo said.

Knight, a top U.S. market maker - a brokerage that buys and sells stocks for clients and ensures orderly trading - had resolved the issue by Wednesday night.

All U.S. stock markets were shut on Monday and Tuesday in response to firms' worries about employee safety during the storm, as well as concerns about markets functioning effectively on contingency plans with light staffing in place.

It was the first time in 27 years that exchanges closed because of bad weather. As of Thursday evening, the New York Stock Exchange was still running on generator power.

It was the second time in three months Knight had to ask clients to route orders elsewhere.

On August 1, Knight was forced to route orders to other brokerages due to a software glitch that sent a deluge of unintentional trades into the market, leaving it with a massive position it had to unload at a loss of more than $400 million. Knight had to take on new investors to avoid bankruptcy.

The problem on Wednesday was unrelated.

(Reporting By John McCrank; Editing by Steve Orlofsky, Bernard Orr)