Knight Capital Americas LLC Case Solution & Answer

Knight Capital Americas LLC Case Study Analysis


On the 1stAugust, Knight Capital faced the biggest stock disruption issue due to the programming disruption. The disruption took place because the technician forgot to replicate the new “Retail Liquidity Program (RLP)” code in one of the eight “SMARS pc servers”, which was “Knight machine driven steering framework” for value orders. RLP reused a banner that was unable to initiate the new work called as “Power Peg”. Power stake had intended to move stock expenses higher or lower to check the conduct of business calculations during a controlled environmental factors.Once the function released into production; Knight’s trade exercises caused a genuine interruption, leading theKnight to have a tainted reputation in the market. (Nolan, 2020)

Procedures to Avoid Disruption

The possible features that could have been performed in order to avoid disruption, are as follows:

  • It is a very important duty of the technicians to cross-check every activity or the work assigned to them, before leaving the firm.
  • Knights could have assigned a head or supervisor that would be responsible to finalize everything and make sure that the work is going according to the described details.
  • The technical department members should be more efficient and responsible.

These are the possible protocols that must have been performed by the staff in order to avoid any disruption and to maintain the overall competitiveness of the organization.


In the August, 2012, the technical issue had occurred due to the poor testing of the software. It caused the Knight’s stock pretax prices to crumble and lose up to “$450” million bucks. The CEO of the company “Joyce” and other administrators were also responsible as they were the key call producers inside the firm.

Joyce (The CEO of the Knight’s Capital)

Joyce was held accountable because of being the company’s CEOand was an important figure that were responsible for the company’s overall features and to improve the company finances. He is accountable to propose the company to dynamic progress and to satisfy their customers.

Leading Group of Managers

The “leading group of managers or board of directors” are responsible for approving any business idea or processes that align with the organizations. They were responsible for the final testing of the equipment’s. Likewise the directors of the company were held accountable because they didn’t check the final testing of the system. They were responsible for the following major features:

  • They were responsible to re-test the finalized software by standardizing them with the standard protocols.
  • They must have the knowledge of recovery measure so that in any case of error’s occurrence; they cut or recycle it.
  • The directors were responsible for the compliance protocols of the system

If all of the company’s figures take their part well and perform their duties with responsibility; there would be extremely less chances of bugs and the company can continue to grow and prosper further in future.


In this case, the Knight’s capital has incurred a loss of an enormous amount of pre-tax, i.e. approximately “$440 million due to the poor testing of its software. The poorly tested software was implemented in such a high frequency that it lost the firm’s pre-taxes in 30 minutes. The lessons that can be learned from this case are the final testing of the products before the processing. The case highlights the importance of the products protocols and maintenance which is that the products must be tested in required protocols as well as in a controlled environment. Another important lesson that the case highlights is the strict training of the staff towards their responsibilities. Staff members are required to train frequently through meeting procedures.

The case likewise changes how we might interpret large Modern Corporation and how weak they are when it comes to quality errors. The bigger firm should be more cautious regarding their strategies and programming settings on the grounds that the accounts scopes of these organizations are higher and they can lead towards a massive misfortune. The case builds up making and keeping up with safeguard framework so the firm can avoid and mitigate massive errors……………….

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