Knight Capital Group was an American global financial services firm specializing in market making, electronic execution, and institutional sales and trading. Founded in 1995 by Kenneth Pasternak and Walter Raquet, the company pioneered the shift from human-centered trading to computerized high-frequency trading algorithms, becoming the largest trader in U.S. equities with a 17.3% market share on the NYSE and 16.9% on NASDAQ. Headquartered in Jersey City, New Jersey, Knight served major clients including broker-dealers, hedge funds, and institutional investors, handling an average daily trading volume exceeding 3.3 billion shares worth over $21 billion. By 2011, it reported revenues of $1.404 billion and net income of $115.2 million, employing around 1,418 people.

The firm faced a catastrophic setback on August 1, 2012, when a software deployment error in its automated routing system triggered erroneous trades. Intended for 212 small retail orders, the glitch unleashed thousands of orders per second over 45 minutes, resulting in over 4 million trades across 154 stocks and a net long position in 80 stocks, causing a $460 million loss. This incident, which accounted for more than 50% of NYSE trading volume in that period and drove some stock prices up over 10%, nearly bankrupted the company and led to a $440 million emergency bailout from investors. Knight was criticized for inadequate testing, lack of rollback mechanisms, and reliance on legacy code, highlighting risks in high-frequency trading.

In the aftermath, Knight agreed to be acquired by Getco LLC in December 2012, with the merger completing in July 2013 to form KCG Holdings, Inc., under which Thomas Joyce served as chairman and CEO. KCG Holdings continued operations until its acquisition by Virtu Financial in 2017 for $1.4 billion. The Knight Capital episode remains a landmark case in financial technology failures, underscoring the need for robust software governance in algorithmic trading.