Knight Capital, the electronic trading firm which suffered a massive software glitch costing it a pre-tax loss of US$440m last week, could have found a white knight to bring it out of financial trouble.

According to a report by UK newspaper the Guardian, which did not disclose its source, the company is expected to announce a US$400m financing deal with a group of investors later today.

It said shares in the company are believed to have fallen from US$10.33 last Tuesday to a worth of just US$1.50.

But investors that include the Blackstone Group, Getco, TD Ameritrade, Stifel Nicolas, Jefferies Group and Stephens Inc could be about to come to the rescue.

Knight uses electronic trading systems to buy and secure stock. Last Thursday, when the NY Stock Exchange opened, new trading software installed on its systems caused the company to sell all stocks bought the previous day.

The incident “severely impacted” Knight’s capital base, and led many analysts to suggest the company could be on the brink of collapse as a result.