Bloomberg reports that Goldman Sachs was among firms to have increased holdings in Knight Capital during the second quarter, before the market-making firm lost $440m on a computer malfunction this month.
Brokerage and asset-management units at Goldman Sachs increased their stakes in Knight Capital by 73% to 2.39m shares, valued at $28.5 million at the end of June, according to a regulatory filing.
Knight, whose market-making unit executes 10% of U.S. equity volume, has plunged more than 70% since a computer malfunction bombarded the market with errant orders August 1st.
In the meantime, Reuters reports that Goldman Sachs Chief Executive Lloyd Blankfein and other bank officials won the dismissal of a shareholder lawsuit accusing them of tolerating poor mortgage practices and quitting a federal bailout program early to boost executive pay.
U.S. District Judge William Pauley in Manhattan said the shareholders failed to show there were 'red flags' to put bank directors on notice of 'broken controls' in Goldman's mortgage servicing business, including that workers at its Litton unit may have been 'robo-signing' documents.
image: © Fighting Irish 1977