The Typo That Cost A Quarter Of A Billion Dollars (At Least)

from the double-check-your-data dept

Earlier this year, we had a story about a Taiwanese stock trader who made a typo on on a new trading platform her company was using -- costing the firm $251 million. We were surprised that any kind of equities trading software wouldn't have controls to catch such trades, but apparently not. Now we have yet another example. Head up to Japan and you find a case where a trader who might not have had enough caffeine swapped the number of shares he was trying to sell with the price, so that instead of selling one share for 610,000 yen ($5,065), he tried to sell 610,000 shares (40 times the outstanding shares) for (yup) one yen. The system was smart enough not to let the sale go through for one yen, but it did sell many shares at a steep, steep discount. The company whose equity was at stake was having their IPO, so they couldn't have been particularly thrilled. The investment bank, Mizuho Securities, has been scrambling to buy back all the shares they sold -- at a huge premium. So far, the estimates are that the bank has lost $224 million for this little typo. So, with two examples in just a few months showing how little trading typos lead to quarter of a billion dollar losses, don't you think someone might look into making the software that traders use a bit... uh... smarter?
Hide this

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team


Reader Comments

Subscribe: RSS

View by: Time | Thread


  1. identicon
    Boo, 12 Dec 2005 @ 3:36am

    Bangalored?


    i have a good friend who works for an investment bank in London who does nothing but writes proceedures and checking mechanisims on the traders software to prevent this stuff happening. It's down to a fine art. I find it amazing that this kind of error is still happening - i'm willing to bet the the checking mechanisim was "Bangalored"!

Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here



Subscribe to the Techdirt Daily newsletter




Comment Options:

  • Use markdown. Use plain text.
  • Make this the First Word or Last Word. No thanks. (get credits or sign in to see balance)    
  • Remember name/email/url (set a cookie)

Follow Techdirt
Advertisment

Report this ad  |  Hide Techdirt ads
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Discord

The latest chatter on the Techdirt Insider Discord channel...

Loading...
Recent Stories

This site, like most other sites on the web, uses cookies. For more information, see our privacy policy. Got it
Close

Email This

This feature is only available to registered users. Register or sign in to use it.