Knight Capital received good news this week, with the announcement that the firm has received an infusion of $400 million from private-equity firm Blackstone Group, market maker Getco and a host of financial firms that include Jefferies & Co., Stephens, Inc., Stifel Nicolaus & Co, and TD Ameritrade Holding Corp.

The funding should go a long way in helping the Jersey City–based brokerage and market-making firm stay in business and recover from the impact of “an issue with trading technology,” according to Knight Capital CEO Tom Joyce. Knight spokeswoman blamed problematic routing software — not an algorithm — that resulted in wild swings in the price levels of more than 140 stocks for up to 45 minutes last week on the New York Stock Exchange and the loss of $440 million for Knight.

But some traders remain concerned about the precise nature of the technical breakdown, attributed to software built internally at Knight that appears to have been poorly constructed and tested. What went wrong with Knight’s routing software, designed to interact with a new trading venue on the New York Stock Exchange? Why wasn’t there an effective fail-safe system in place to more quickly right the error? Why didn’t the pre-launch testing process catch this problem? And did the event violate any new SEC rules designed to protect the market from rogue computer software activity? In addition to an internal review, a Knight spokeswoman says the company will soon select an outside firm to conduct an independent analysis of the event.

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