In this illustration, the Interactive Brokers LLC logo is displayed on a smartphone.
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Interactive Brokers on Wednesday revealed a $48 million loss due to glitches at the New York Stock Exchange earlier this month, which at one point saw the stock prices of some companies drop 99%, including Warren’s. Buffett. Berkshire Hathaway.
Interactive said the brokerage firm applied for compensation from the NYSE for these losses, but the exchange denied their request.
Outages due to software and hardware glitches have become common as trading moves from exchanges and pits to electronic systems, but glitches can rattle markets and frustrate investors. . In some cases, they may also require oversight from regulators and disputes with brokers.
Interactive said its losses stemmed from a client’s attempt to take advantage of a large drop in Berkshire’s stock price.
Customers flocked to buy Berkshire Class A shares after the price fell to $185 from $622,000 per share. They placed a “buy” order after trading in the stock was halted, hoping their trade would be filled at a price near $185.
However, after resumption, customer transactions were executed at prices as high as $741,971.39, Interactive said. The bankruptcy request for transactions completed at such “unusually high” prices was rejected by the NYSE, the brokerage added.
Interactive has since taken over a “significant” portion of those transactions. It is considering options, including legal recourse, but does not expect the losses to have a material impact on its finances.
NYSE declined to comment. The Intercontinental Exchange-owned exchange attributed the outage to a technical issue earlier this month.
