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      Interactive Brokers Reports $48 Million Loss Following Berkshire Hathaway NYSE Technical Glitch

      Published: just now

      Interactive brokers

      Interactive Brokers Group, Inc. (Nasdaq: IBKR) has disclosed a significant financial impact resulting from a technical malfunction at the New York Stock Exchange (NYSE) on June 3, 2024. The incident involved Berkshire Hathaway Class A shares (BRK A) and resulted in a loss of approximately $48 million for the brokerage firm.

       

      On the morning of June 3, at around 9:50 am EDT, BRK A shares experienced an abrupt price drop from approximately $622,000 to $185 per share due to an unspecified technical issue at NYSE. This precipitous decline prompted NYSE to halt trading in BRK A shares.

       

      During the trading halt, some Interactive Brokers clients placed market buy orders, presumably anticipating execution at the anomalously low price. However, when NYSE resumed trading at approximately 11:35:54 am EDT, the share price opened at $648,000 and rapidly climbed to as high as $741,971.39 over the next 98 seconds. Many client orders were filled during this price surge.

       

      Interactive Brokers promptly filed a clearly erroneous execution (CEE) petition with NYSE and other U.S. exchanges, seeking to nullify trades executed at unusually high prices. However, NYSE, in conjunction with other U.S. stock exchanges, declined to act on the petition.

       

      In response, Interactive Brokers decided to assume a substantial portion of these trades as a customer accommodation. The company also filed claims for compensation with NYSE, which were subsequently denied in full on June 25, 2024.

       

      The resulting losses, including those from certain hedge transactions, amount to approximately $48 million. Interactive Brokers states that it is considering options for recovering these losses, including potential legal action against NYSE or related entities.

       

      The company's press announcement states, “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.”

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