(Reuters) -Interactive Brokers on Wednesday reported a $48 million loss due to an outage at the New York Stock Exchange earlier this month, which at one point saw a 99% drop in the stock prices of some companies, including Warren Buffett’s Berkshire Hathaway.
The brokerage firm had filed claims with the NYSE seeking compensation for these losses, but the exchange denied the request, Interactive said.
Outages caused by software and hardware glitches have become common as trading has moved from floors and pits to electronic systems, but glitches can disrupt markets and frustrate investors. In some cases, they can also lead to regulatory scrutiny and disputes with brokers.
Interactive said the losses stemmed from an attempt by its clients to profit from the massive drop in Berkshire’s share price.
Customers rushed to buy Berkshire’s Class A shares after the price fell from $622,000 each to $185. They placed ‘buy’ orders after the stock halted trading, expecting their trades to be executed at a price near $185.
However, after trading resumed, clients’ trades were executed at prices as high as $741,971.39, Interactive said. The request to break trades completed at such “anomalous” high prices was rejected by the NYSE, the trading platform added.
Interactive subsequently took over a “substantial” portion of these transactions. The country is considering its options, including legal action, but does not expect the losses to have a material impact on its finances, the report said.
The NYSE did not immediately respond to a Reuters request for comment. The Intercontinental Exchange-owned exchange attributed the disruption to a technical problem earlier this month.
(Reporting by Niket Nishant in Bengaluru; Editing by Shailesh Kuber)
