A group of investors rescued Knight Capital Group Inc. in a $400 million deal that keeps the embattled leader in U.S. market-making for equities in business, but comes at a huge cost to existing shareholders, Reuters reported.

Blackstone Group LP, rival market maker Getco LLC and financial services companies TD Ameritrade Holding Corp., Stifel Nicolaus & Company Inc., Jefferies Group Inc. and Stephens Inc. purchased preferred shares for what works out to be a 73 percent stake in the company, Knight said in a statement just before markets opened today.

At one time the largest U.S. provider of retail market-making in New York Stock Exchange and Nasdaq-listed stocks, Knight buys and sells shares for clients.

It also provides liquidity to equity markets by stepping in to buy and sell stocks, using its own capital to ensure orderly activity.

The company still could face litigation from shareholders who have seen the value of their holdings plummet.

The potential liability could increase if it were found that Knight violated market rules, Reuters said. Knight's problems started early on July 30, when a software glitch flooded the New York Stock Exchange with unintended orders for dozens of stocks, boosting some shares by more than 100 percent and leaving the company with the trading loss.

Regulators are trying to determine whether Knight violated a new rule designed to protect the markets from rogue algorithmic computer trading programs.