Interactive Brokers Takes $48 Million Hit From NYSE Technical Issue Tanking Berkshire Hathaway Stock
By Dean Seal
Interactive Brokers faces around $48 million in losses stemming from a technical issue at the New York Stock Exchange that caused the price of Berkshire Hathaway Class A shares to plummet in a matter of seconds earlier this month.
The brokerage firm said Wednesday that the exchange has denied its claim for compensation after Interactive Brokers took over a substantial portion of trades that were filled at anomalously high prices as a result of the issue.
Interactive Brokers is now weighing its options for recovering the losses, including potential litigation. The company said those losses aren't expected to have a material impact on its financial condition.
The New York Stock Exchange's unspecified issue resulted in Berkshire's Class A shares falling from about $622,000 to about $185 not long after the market opened on June 3, prompting the exchange to quickly halt trading in the shares.
Various clients at Interactive Brokers' subsidiaries submitted buy orders during the halt, hoping to buy up the cratered stock, the brokerage said. When trading resumed less than two hours after the halt, shares were initially priced at $648,000 and moved as high as $741,971 in less than two minutes.
Many of the buy orders placed at Interactive Brokers' subsidiaries were filled at various prices during the run-up, including the peak price, the brokerage said. Interactive Brokers then petitioned the New York Stock Exchange to bust certain buy orders filled after trading resumed, but the exchange declined, the brokerage said.
Interactive Brokers then decided to accommodate customers by taking over a substantial portion of the affected trades and filed compensation claims which the New York Stock Exchange has since rejected.
Write to Dean Seal at dean.seal@wsj.com
(END) Dow Jones Newswires
June 26, 2024 09:59 ET (13:59 GMT)
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