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Cantor Fitzgerald CEO Howard Lutnick on his discussions with Knight Capital and the safety nets in place to avoid technological errors.
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You very much fallout from Knight capital is unleashing scrutiny on electronic traits because as you know.
It was a glitch in electronic trading program that set everything haywire and the company nearly went down.
My next guest company has been embracing technology for more than a decade quite full throttle with the new high speed microwave data network.
In a Fox Business explosive I'm joined by Howard what -- chairman and CEO of Cantor Fitzgerald.
And BGC partners.
First of all have to ask -- the big question at any point since August 1 since the trade went haywire.
Did you Cantor Fitzgerald BGC look at this and say.
I'm gonna scoop up a portion or all of it.
Sure I mean we called and said we'd be happy to go in.
Make an investment but I think the -- -- Knight Frank wanted to split up investments and no one strong would be a part of it that's like six guys came in a recap the company.
And you would have just prefer to do it what solely by yourself now without send some private equity guys -- we offered to go women and take a look at the company and they said no that's okay we have enough people and that was Thursday night.
But Howard when you look at.
The company I'm sure Thursday night you're picking through at least some of what's inside that company.
That somebody let this -- trade go for 45.
Minutes before catching it would that happen.
At any company you want.
-- can't come you would figure every three -- five seconds and alarm go off.
It's about a fifteen seconds after there's a problem it would be deafening in the place and you have to build in things in your systems where they turn themselves off.
Right it can't be about somebody running and unplugging that thing it should just be.
Core an inherent in the system if something goes wrong it shuts itself down and kills itself and if you don't build that -- that's just.
It's impossible to think of how -- wouldn't nobody -- it just doesn't make sense.
In 2012 OK so I want our viewers to know that Cantor Fitzgerald BGC a because your chicken flapping -- -- 200 trillion in trades their financial systems and many of them electronic every year.
So what do you have built and that they get.
Well look everything about our system is designed to check and double check and triple check and quadruple check itself all the time.
And that's why we're able to survive 9/11 that's why we survived 0809.
It's a way of thinking it's a way of processing.
You know you can't make fundamental mistakes like that and if you do make a mistake.
You darn -- -- catch it in one minute one -- it gonna cost them two million dollars he'd be embarrassed.
But he is someone who was picking on Bob -- -- and then what.
Two weeks later business and to -- -- -- -- the NASDAQ and the FaceBook -- that couldn't get those pipes working and so they are on the hook for some sixty million -- nothing compared to what.
What -- was doing.
Nonetheless PTC has started to work with a company called thesis technologies threat to create a high speed microwave financial data network.
I don't that is but it sounds like a look at what's it would really speed trades and financial information between what the Chicago Merc.
And the NASDAQ and all of the other operations here in New York the exactly right so the idea is to take.
Information that's in Chicago and get -- to New York as fast as possible get information from New York out to Chicago as fast as possible and get that information.
To our clients computers obviously as quickly as possible and you know there's always a faster way to do it and we -- in the world of computers trading against computers.
It's a race like that the hundred meters last night you know it just.
A race to be faster and faster and faster and so the idea is to be technologically capable you've just got to get the information front of your clients as fast as possible.
And microwave technology.
Is the way to do it the fastest and -- -- line.
Will be quicker than even dark fiber -- argue aren't you paying a lot for that I would imagine you've spent a pretty penny on -- Of course of course we did but what that does is it means we have the fastest network between us in Chicago for our clients -- of the trade futures.
To be able to trade against futures -- understand bond prices when the trading interest -- can you be sure.
That on -- capital robot trade that went crazy can't happen at your place -- can be certain of -- because we build in relentlessly.
Things that protect themselves and they have to turn themselves off it simply you need to have overlaying technology that says if you lose a dollar turn it -- I mean how hard is this.
We can't be 45 minutes it's just -- darn long.
Power is going to be back in a minute about its business of trading ideas that's coming.
