Japanese stockbroker's 'fat finger' wipes $617 billion in trade orders
The orders for shares in 42 companies were cancelled by accident yesterday. (AAP)
A stockbroker in Japan is believed to have caused $617 billion in share orders to be wiped after pressing the wrong key while inputting data.
The orders for shares in 42 companies were cancelled late yesterday in a case of "fat fingers", a phrase commonly used in investment circles for human error.
The largest order was for 1.96 billion shares of car manufacturer Toyota, according to Bloomberg News.
Other share orders were for Honda, Canon, Sony and Nomura Holdings.
This is not the first time a fat finger trading error has occurred.
In 2009, UBS AG mistakenly ordered 3 trillion yen of Capcom convertible bonds while in 2005, Mizuho Financial Group’s securities unit was unable to scrap an error for J-Com Co. The error cost the bank 27 billion yen.
“I’ve never heard of orders this big being cancelled before,” Sumitomo Mitsui Trust Bank strategist Ayako Sera said.
“There must have been an error.”
Japan Securities Dealers Association received an error report from one of its members though little else is known about the incident.
“It’s not rocket science that there was a fat finger here, but it reopens the question about accountability,” Parry International Trading managing director Gavin Parry said.
“There is a probability a broker mistook the number of shares for the value of shares. We guess that’s why the OTC market sees big crosses – it’s easier to cancel errors.”
Due to the order being cancelled, no financial transactions were processed.
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