U.S. Stock Market News
Glitches in System Cost Knight Capital Group $440 million
Knight Capital Group, one of the largest trading firms in the U.S., stock plunged nearly 50% by midday Thursday, trading at its lowest price since 1998. The steady plunge resulted from faulty software forcing the company to buy a great number of stocks at an inflated value and then sell all those stocks at a lower price, which sent dozens of U.S. stocks swinging more than 10 percent.
The company is scrambling to secure a buyer or investor to facilitate a potential merger to save the company after the severe loss. Knight intends to continue trading and market-making while it considers its options.
U.S. Securities Regulation
Bristol-Meyers Executive Accused of Insider Trading
In June, Bristol-Meyers announced a deal to buy Amylin Pharmaceuticals for nearly $7 billion. Before the deal went public, one executive at Bristol-Meyers used his insider knowledge to make a profit, federal prosecutors say.
Robert Ramnarine has been charged with insider trading. He faces three counts of securities fraud, accused of trading call options of companies involved in the potential deal. The accusations center on personal trades he made in the call options of the three companies that Bristol-Meyers was acquiring—ZymoGenetics, Pharmasset, and Amylin. Ramnarine pocketed nearly $300,000 on the transactions, according to the complaint. These charges come amid a wide-scale crackdown by the federal government on insider trading.
Illinois Becomes Third State to Pass Social Media Privacy Law
On Wednesday, Illinois became just the third state to pass a law that prohibits employers from requiring employees or job applicants to provide access to their social media accounts. Maryland and Delaware are the two other states who have passed similar laws. Opponents argue that the social media privacy laws benefit businesses and schools by shielding them from legal liablity, e.g. alleviating the legal duty to monitor password-protected digital content.
California has a similar bill under consideration and will likely be the next state to pass it. Michigan and New Jersey are currently in the midst of passing similar legislation. Similarly, a committee of the U.S. House of Representatives is considering the Social Networking Online Protection Act, which would prohibit employers from requiring applicants or workers to provide passwords as a condition of employment.
The London Games in Full Swing
Olympic News: U.S. dominates the pool and women’s gymnastics
It’s that time again. The Olympics are in full swing, and national pride is at an all-time high—and as a result, worker productivity may suffer. The U.S. men’s and women’s swimming teams have accumulated 23 of the U.S. 37 medals—11 of which are gold—as of midday Thursday. Similarly, the U.S. women’s gymnastics team dominated in the team event, winning gold, as well as the all-around competition, with Gabby Douglas winning the gold medal. We look forward to the remaining 10 days, go Team USA!