23 May 2015

UBS blames erroneous three trillion yen trade on 'system error'

25 February 2009  |  10497 views  |  0 Financial business meeting charts on desk

Swiss bank UBS has confirmed that a "system error" was responsible for the entry of an erroneous trade for three trillion yen at the Tokyo Stock Exchange on Tuesday.

UBS told the Bloomberg newswire that its Japanese unit mistakenly ordered $30.9 billion of Capcom Co. convertible bonds, 100,000 times more than it intended, because of an internal system error.

The trade on the Tokyo Stock Exchange's ToSTNeT system was quickly spotted and canceled at no cost to UBS, and trading in Capcom coupons suspended while the deal was reversed.

In 2005 a 'fat-finger' error by a Mizuho Securities dealer caused pandemonium on the Tokyo Stock Exchange when 610,000 shares in recruiting company J-Com were put up for sale at one yen each, instead of one share for Y610,000.

The brokerage was forced to buy back the shares from market investors at a massive loss after the TSE dealing system failed to respond to an order to cancel the trade. The incident, among others, led to the resignation of TSE chief Takuo Tsurushima and an overhaul of the Exchange's error-prone trading infrastructure.

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