Knight Capital’s trading glitch, which caused it to suffer losses of about £281 million, was triggered by the accidental reactivation of old computer software, according to people familiar with the matter.

On 1 August, Knight revealed that it had experienced a problem with its trading software, which resulted in it sending numerous erroneous orders in NYSE-listed securities into the market.

It has since said that “the software has been removed from the company’s systems”.

According to reports on Bloomberg, once the dormant system was reactivated it began multiplying stock trades by one thousand.

Furthermore, Knight’s staff had to sift through eight different sets of software before they were able to determine the cause of the problem.

Knight’s massive loss in capital led to a consortium of Wall Street firms having to inject some $400 million (£256 million) into the company in an attempt the reverse the damage caused by the glitch.

The convertible share placement agreement, which gives the firms control of the broker, involves GETCO, Blackstone Equity Ameritrade and Stifel.

The debacle also resulted in the New York Stock Exchange (NYSE) having to assign trading responsibility for more than 670 securities to rival GETCO’s IT platform. However, this was only for a limited period and responsibility has since reverted back to Knight.