Computer glitch results in volatile trading for Wells Fargo, RBS; Affiliated Managers prices

By Stephanie N. Rotondo

Phoenix, Aug. 1 - The equity markets were rattled Wednesday by a computer glitch at market maker Knight Capital Group that resulted in confusing trading.

A trader said about 150 New York Stock Exchange-listed securities were affected including at least two preferred stock issues: Wells Fargo & Co.'s 5.625% trust preferreds and Royal Bank of Scotland Group plc's 7.65% series F noncumulative dollar preference shares.

The technical issue resulted in higher-than-usual volume for the securities as well as volatile price changes.

The trader said the Wells Fargo issue - which had closed at $25.56 on Tuesday - traded as low as $22.80 due to the algorithm error.

"Volume is crazy," he added. The issue saw about 4 million preferreds change hands. Volume the day before was around 48,000 preferreds.

The NYSE has said it will review trading in at least 143 securities and that trades in at least six issues will be canceled. The Wells Fargo and RBS issues were not on that list.

In the primary, Affiliated Managers Group Inc. priced $200 million of $25-par senior notes due Aug. 15, 2042. At least $100 million of the notes were expected to be sold, and price talk was between 6.5% and 6.625%. The deal came upsized and at the tight end of talk.

In recent deals, BB&T Corp.'s $1 billion of 5.625% series E noncumulative perpetual preferreds officially listed on the NYSE. A source said they were among the day's most actively traded issues.

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