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Knight Capital sells Deephaven to Stark

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Knight Capital has agreed to sell its troubled Deephaven Capital Management unit to Stark Investment, a $10 billion multistrategy firm founded by Brian Stark and Mike Roth.

Stark is buying Deephaven largely for its $1.4 billion Deephaven Global Multi-Strategy Fund. Stark, of St. Francis, Wis., will give investors in the Deephaven multistrat the option of cashing out or moving their interests into Stark Investments, the firm’s flagship multistrategy vehicle.

When the deal closes, possibly as early as the end of February, Stark will pay $7.3 million for Deephaven. Stark could pay up to $37.3 million more, depending on the