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Interactive Brokers (NASDAQ:IBKR) incurred a loss of ~$48M related to a technical issue at the New York Stock Exchange on June 3, 2024, that had indicated that Berkshire Hathaway (NYSE:BRK.A) class A shares had plunged to ~$185 per share from ~$622K in a space of a few seconds, the company disclosed on Wednesday.
The brokerage said some of its clients had submitted buy orders during the trading halt of Berkshire A shares (BRK.A), expecting that those orders would be filled at ~$185 per share when trading resumed.
However, the NYSE “without any further notice and without addressing a substantial order imbalance that developed during the halt,” IBKR said, resumed trading of BRK.A at ~11:35:54 AM ET at $648K. Within the next 98 seconds, the price of BRK.A jumped 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,” Interactive Brokers (IBKR) said.
The company filed a clearly erroneous execution (“CEE”) petition with the NYSE and certain other U.S. exchanges, seeking to void the trades that occurred at anomalously high prices in the “disorderly market that followed the resumption of trading.” Several hours later, the NYSE told Interactive Brokers (IBKR) that it and the other U.S. stock exchanges declined to act on IBKR’s CEE petition.
That same evening, the company decided to take over a substantial portion of those trades as a customer accommodation. It also filed claims for compensation with the NYSE, which were denied in full on June 25, 2024.
“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,” Interactive Brokers (IBKR) said.
IBKR said it doesn’t believe the losses will have a material effect on its financial condition.