Interactive Brokers Trading Notice
26 June 2024 - 10:36PM
Business Wire
Interactive Brokers (Nasdaq: IBKR), On the morning of Monday,
June 3, 2024, at approximately 9:50 am EDT, the price of Berkshire
Hathaway Class A shares (“BRK A”) suddenly plummeted in the space
of a few seconds from approximately $622,000 per share to
approximately $185 per share. This occurred as part of an
unspecified technical issue at the New York Stock Exchange
(“NYSE”). This technical issue and dramatic price event led NYSE to
promptly halt BRK A from trading.
News of BRK A’s anomalous price drop quickly spread across
social media. Some of the clients of the various brokerage
subsidiaries of Interactive Brokers Group, Inc. (together with its
subsidiaries, the “Company”), in an apparent attempt to take
advantage of this “opportunity,” submitted market buy orders during
the trading halt, presumably expecting those orders to be filled at
approximately $185/share when trading resumed.
Without any further notice and without addressing a substantial
order imbalance that developed during the halt, NYSE resumed
trading of BRK A at approximately 11:35:54 am EDT at a price of
$648,000. Over the next 98 seconds, the price of BRK A rose to as
high as $741,971.39 per share. Many of the Company’s clients that
had placed market buy orders during the trading halt were filled at
various prices during this run-up, including some who were filled
at the peak price.
The Company promptly filed a clearly erroneous execution (“CEE”)
petition with NYSE and certain other U.S. exchanges, seeking to
bust the trades that had occurred at anomalously high prices during
the disorderly market that followed the resumption of trading. NYSE
did not respond to that petition until several hours later, after
the close of regular trading hours. At approximately 6:30 pm EDT,
NYSE informed the Company that it had determined, together with the
other US stock exchanges, that it would decline to act with respect
to IBLLC’s CEE petition.
That evening, the Company determined to take over a substantial
portion of these trades as a customer accommodation. The Company
also promptly filed claims for compensation with NYSE. On June 25,
2024, NYSE notified the Company that it had denied those claims in
full. As a result, the Company has realized losses (including
losses on certain hedge transactions) in the amount of
approximately $48 million.
The Company is continuing to consider its options with respect
to recovery of these amounts, including any claims at law it could
assert against NYSE or related entities. The Company does not
believe that these losses will have a material effect on its
financial condition.
About Interactive Brokers Group, Inc.:
Interactive Brokers Group affiliates provide automated trade
execution and custody of securities, commodities, and foreign
exchange around the clock on over 150 markets in numerous countries
and currencies, from a single unified platform to clients
worldwide. We serve individual investors, hedge funds, proprietary
trading groups, financial advisors and introducing brokers. Our
four decades of focus on technology and automation has enabled us
to equip our clients with a uniquely sophisticated platform to
manage their investment portfolios. We strive to provide our
clients with advantageous execution prices and trading, risk and
portfolio management tools, research facilities and investment
products, all at low or no cost, positioning them to achieve
superior returns on investments. Interactive Brokers has
consistently earned recognition as a top broker, garnering multiple
awards and accolades from respected industry sources such as
Barron’s, Investopedia, Stockbrokers.com, and many others.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240626609524/en/
Contact for Interactive Brokers Group, Inc. Media: Katherine
Ewert, media@ibkr.com
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