The market maker, which had been running on backup generators since Sandy landed on Monday evening, is said to have lost power around 11:45 a.m. yesterday. According to a memo obtained by The Times, the firm told clients that "all computer interfaces with Knight will be shutdown with no new orders, both by phone or electronic, being accepted at this time."

It's been a hard year for Knight. The firm was one of the market makers to lose millions to technical difficulties at Nasdaq during Facebook's initial public offering, then required rescue from outside investors after losing $440 million due to a technical glitch in its own trading program.

Citadel Group and Goldman Sachs were among the firms to take increased trading volumes during Knight's outage, according to Bloomberg.

Other new from around Wall Street:

Morgan Stanley's office building at 1 New York Plaza, and AIG's headquarters at 180 Maiden Lane, will be closed for weeks as building managers deal with flooding after the storm, according to Bloomberg.

Activist investor Carl Icahn disclosed a 10 percent stake in Netflix in a filing with the Securities and Exchange Commission yesterday. “The reporting persons believe Netflix may hold significant strategic value for a variety of significantly larger companies that are engaging in more direct competition with one another due to the evolution of the Internet, mobile, and traditional industry,” Mr. Icahn said in the filing, according to The Times.

A British man charged with involvement in an insider trading scheme that stretched from New York to Central Asia told an informant he got privileged information from a former director of the New York Stock Exchange, reports Bloomberg.

The Federal Energy Regulatory Commission said it was seeking $435 million in civil penalties from Barclays for alleged energy market manipulation in the Western U.S. between 2006 and 2008. Barclays, which agreed to a $450 million settlement this summer over Libor-rigging charges, is also facing a Justice Department anti-corruption investigation over the firm's efforts to raise money in the Middle East in the early days of the financial crisis, The Journal reports.

JPMorgan is suing Javier Martin-Artajo, the trading manager who supervised the gamble on credit derivatives that led to the bank's $6 billion London Whale loss, in London Court.

JPMorgan's internal investigation into trading losses associated with the trader known as the London Whale is far from over, and has required the efforts of more than 100 hundred lawyers, Reuters reports. U.S. authorities have also begun interviewing witnesses, and a high-quality internal probe may be helpful in dealing with the government.

As Knight Capital was reeling in the aftermath of a $440 million trading loss, JPMorgan refused to accept thousands of securities Knight hoped to use to obtain financing to stay afloat, The Wall Street Journal reports. JPMorgan's hesitance came amid a review of the banks dealings with brokerages that use JPMorgan to clear trades.

The Journal gathered economists' expectations for Fed chairman Ben Bernanke's speech in Jackson Hole.

Rumor is that Bundesbank President Jens Weidmann, a strident critic of proposed intervention by the European Central Bank in sovereign debt markets, may resign.

Nomura will take $1 billion of costs out of its wholesale unit, which includes investment banking and trading operations, according to Bloomberg.

Spain is considering pumping its own money into Bankia SA, the failed lender thought to be headed for a European bailout, in a move that would protect junior creditors, Bloomberg reports. Does Spain have enough cash?

Greece announced plans to slash public sector wages, pensions and social spending to find the savings needed to satisfy European rescuers.

The unemployment rate in the eurozone rose to a record 11.3 percent in July.

Nobody knows anything about investing, according to an SEC study on financial literacy, and so leave the stock-picking to the experts, writes Kevin Roose.

UBS, which says it lost $356 million due to Nasdaq's technical difficulties, has said it will sue. Citadel, on the other hand, filed a letter with the SEC saying that Nasdaq's proposed remedies are fair.

In the wake of Knight Capital’s $440 million loss due to a rogue trading algorithm earlier this month, two exchange industry executives are talking up a fat finger provision, allowing regulators to roll back the tape and undo trades in exceptional cases.

The Malkins want to form a REIT to take the Empire State Building public. Some crotchety old New Yorkers are holding up the deal. Bloomberg's David M. Levitt goes long.

Angela Merkel and François Hollande are getting ready to play stern parents to Antonis Samaras as the Greek prime minister begins a trip through Berlin and Paris to ask the European powers for more time to reach austerity goals. Tough talk aside, Retuers suggests Europe may have little choice but to give Greece "a bit of air to breathe."

Will Greece leave the euro before it can be kicked out? Does it matter?

Amid the back-and-forth over Peter Thiel’s sale of 72 percent of his Facebook holdings, Bloomberg asks around, and reports such sudden divestiture to be unusual.

Best Buy founder Richard Schulze, who is working on a bid to take the electronics retailer private, and the Best Buy board are negotiating again over whether and under what conditions to allow Mr. Schulze to conduct due diligence on Best Buy's books.

The Fed's Open Market Committee hinted at further easing in meeting minutes released yesterday, and markets rallied.

It doesn't matter how loud you shout about the fiscal cliff (which, the Congressional Budget Office says could lead to a "significant recession" if lawmakers don't act). The news always seems to get buried.

Securities and Exchange Commission chairman Mary L. Schapiro wanted to bring changes to the way money market funds are regulated, forcing the funds to hold cash against dark days, or let the funds fluctuate with the market. It's not going to happen, at least not at the moment.

Whale-slayer Boaz Weinstein is struggling to keep his head above water, reports The New York Post. Mr. Weinstein's Saba Capital iMaster Fund is only up 0.62 percent for the year, even after profiting in trades against the JPMorgan trader known as the London Whale.

Standard Chartered’s lawyers believe there's a case to sue DFS over reputational damage, reports The Financial Times.

Add Bank of England governor Mervyn King to the list of Brits tweaked by DFS chief Ben Lawsky's decision to file an order against Standard Chartered without coordinating with other U.S. authorities. King asked regulators to "refrain from making too many public statements until the investigation is completed," at his quarterly news conference.

Knight Capital says malfunctioning trading software cost the firm $270 million after taxes, compared with Knight's previously reported pretax loss of $440.

Knight might have accepted a $500 bailout from Citadel if not for mistrust between the two market-making wholesalers and their respective CEOs.

U.S. prosecutors agreed to a leniency deal for junior UBS employees said to be involved in the Swiss bank's efforts to manipulate interbank lending rates, according to The Wall Street Journal.

Morgan Stanley is seeking to replace some highly-paid bond traders with computers and technicians, The Journal reports.

Goldman Sachs cut its exposure to Italian sovereign debt by 92 percent in the second quarter, according to Bloomberg.

Shockingly, Mariano Rajoy’s efforts to implement austerity measures in Spain have not done wonders for the prime minister's popularity.

In 2008, Goldman Sachs employees contributed $6.1 million to political campaigns, 75 percent of which went to Democrats. This year, Goldman employees have donated $4.9 million, 70 percent of which found its way to Republican coffers.

Banks are taking advantage of low interest rates to stretch profit margins on mortgages, says The New York Times.

The initial public offering for British soccer club Manchester United is oversubscribed, sources tell Reuters. One investor asks: why is the club going public in the U.S., where investors don't know anything about the soccer business?

Buyout specialist Al Tapper spent $200,000 to produce a musical about baseball for which he wrote music and lyrics. The Washington Post called the show "syrupy"; Mr. Tapper said that the show has since undergone extensive rewrites.

The Standard Chartered exec who complained that "f---ing Americans" had no place telling the bank how to do business in Iran appears to be Richard Meddings, according to The New York Post.

We love it when the food fight between banks and politicians spills over to encompass...the entire cities of New York and London. Like when New York congressman Carolyn Maloney asked Jamie Dimon why JPMorgan executed trades that lost billions of dollars out of its London office. Why not New York? Or yesterday, when British lawmaker Mark Field painted reports of bad behavior at Standard Chartered as a battle in the war between the two cities. Reuters also heard complaints of anti-London bias in reference to the DFS order.

Two hedge funds are fighting a legal battle over whether they had a contract to trade $195 million in claims on Bernie Madoff's bankrupt firm. Solus Alternative Asset Management says it struck a deal with Perry Capital over telephone and instant messages; Perry says there never was a deal.

Hedge fund manager Doug Whitman, on trial for insider trading, told government witness Roomy Khan that he had no use for her if she wouldn't break the law, according to The Post. “You’re not going to be a slimeball, what do I want to talk to you for,” Whitman told Khan in a wiretapped conversation.

Knight Capital's privately-financed rescue deal was a bitter pill for investors looking for too-big-to-fail profits.

The Japanese units of Goldman Sachs and JPMorgan were among banks to pledge improvements in guarding client information in the wake of insider trading investigations that have roiled Nomura Holdings and other Japanese financial institutions. Also in Japan, measures to clamp down on loan-sharking were seen tied to a reduction in suicide for "economic reasons." Now restrictions against non-bank lending may be pared back, and observers worry about the consequences.

Deutsche Bank's on-again off-again efforts to sell its real estate fund group, RREEF, is putting the business at a competitive disadvantage, investors and consultants tell The Wall Street Journal.

The lawsuit, we suppose is not so surprising, but the $350 million number is new. Knight Capital has said it lost $35 million to the delays in trading on Facebook's IPO day, and we've been reading that the stock's four biggest market makers—Knight, Citadel, Citigroup and UBS—suffered losses in the neighborhood of $110 million. The CNBC scoop, clearly, would blow that number out of the water, and while Nasdaq specified it would only compensate losses suffered under certain conditions...stay tuned.

Facebook limbo: It's not lost on the Wall Street Journal that investors who bought Facebook shares on the pre-IPO market are stuck with Zuck's plummeting stock until November. (That's when the lock-up period that bars employees from selling shares in the 90 days after the IPO ends.)

Life of Aubrey: Chesapeake Energy founder and chief executive Aubrey K. McClendon leads a lavish and highly leveraged life, Reuters reports. Among the findings: Chesapeake employees charged with conducting Mr. McClendon's personal business, extensive use of company jets, sometimes for dubious business purpose, and loans against Mr. McClendon's stake in the Oklahoma City Thunder, the NBA franchise in which the Chesapeake boss is part-owner.

Winnowing: Goldman Sachs is expected to name fewer than 100 partners this year, one of the smallest classes in recent memory, the New York Times reports, as the firm shrinks staff in response to lower revenue. Goldman has cut its headcount by about 8 percent in the last year, and axed about 50 employees last week. (In 2010, Goldman named 110 partners; in 2008, at the height of the financial crisis, the firm named 94 partners.)

Whither Europe: Spain sold debt, so that was good.

When capital isn't enough: Morgan Stanley is the best-capitalized Wall Street bank. That may make regulators happy, but the firm faces the biggest ratings downgrade from Moody's and trades at the greatest discount to liquidation value.

Prosecution rests: The government is expected to conclude its case in U.S. v. Gupta today.

Occupy no more? Reuters wonders if Occupy Wall Street is over.

Can we meet in the middle? R. Allen Stanford says time served is probably enough; the government, which won a conviction against Mr. Stanford for operating a $7 billion Ponzi scheme, recommended a sentence of 230 years.

The catch is that regulations govern how much the exchange can return to investors to make up for technological malfunctions—such claims are limited to $3 million a month, though Nasdaq has expressed desire to distribute an additional $10.7 million, or the amount the exchange earned on shares it unexpectedly held on Facebook's opening day.

Even at upwards of $14 million, Nasdaq could only begin to pay back losses suffered by Citigroup, UBS, Citadel and Knight Capital—the four largest market makers for Facebook stock who are believed to have lost up to $115 million on the trading delays. Total claims could range from $150 to $200 million, Reuters says, and Nasdaq appears to be playing hardball:

The exchange has done little to conciliate market making clients - a number of which lost tens of millions of dollars each due to the trading problems. There has been no outright apology.

Facebook shares, meanwhile, have continued to face-plant, falling today even as the S&P 500 climbed, coming to rest at $25.87, or down 32 percent from the offering price.

Muted response:

Falling star? Morgan Stanley's star investment banker Michael Grimes believes he did an excellent job with Facebook IPO, according to the Wall Street Journal. Fault for Facebook's languishing stock price—$31.91 at Friday's close—lies with the technical glitches in Nasdaq's trading operation, Morgan Stanley officials are whispering. That won't stop rivals from dropping the FB-bomb when competing with Morgan Stanley for clients.

Hedging Europe: It's unlikely that the European crisis will give way to an investing legend like George Soros, who made $1 billion petting against the British pound in 1992, according to Reuters. Hedge fund managers are plying varied strategies—from currency trades to bets on bank stocks or sovereign debt or even a more bullish attitude towards gold in anticipation of future fallout in Europe.

New polls showed that Greece's pro-bailout parties are gaining, easing fears of a eurozone exit. The news out of Spain was less good, as the government grapples to support ailing lender Bankia SA.

Activist gas: Carl Icahn bought a 7.56 percent stake in Chesapeake Energy, the natural gas giant reeling from a series of disclosures CEO Aubrey McCLendon's potential conflicts of interest. Mr. Icahn has called for the election of a new slate of directors before the board votes on a successor to Mr. McClendon as chairman. “Having the current board select a new chairman without shareholder approval and without allowing for shareholder representation is akin to asking the fox, who has plundered the hen house, to choose another fox to assist it in standing guard over the remaining hens,” Mr. Icahn wrote in a letter to the board.

Pay dirt: Comp at European banks was down.

A Bloomberg columnist sides with Jamie Dimon in wondering about executive pay at media companies.

Bean rush: Hydrofrackers depend on guar gum; farmers in northern India's desert states reap bounty.

New directions: JPMorgan is thinking about putting directors with actual risk management experience on its boards risk committee.

Re-primed: Lou Lebedin, JPMorgan's global head of prime brokerage, is being replaced.