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?
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  1. icon
    Mike (profile), 9 Dec 2005 @ 1:11pm

    Re: No Subject Given

    Ha! I should have just claimed it was on purpose... but, no, it really was a typo.

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