Mizuho fails in legal bid to claw back over 40 billion yen in fat finger trading losses

Mizuho fails in legal bid to claw back over 40 billion yen in fat finger trading losses

The Tokyo High Court has upheld a lower court ruling ordering the Tokyo Stock Exchange to pay 10.7 billion yen to Mizuho Securities over a botched trade in 2005 that cost the Japanese broker 40 billion yen in trading losses.

Mizuho Securities had claimed 41.5 billion yen in damages over the trade, incurred when a dealer inadvertently punched in an order to sell 610,000 shares in J-Com at 1 yen apiece, rather than one J-Com share at 610,000 yen.

Mizuho immediately tried to cancel the order but a TSE trading glitch failed to raise the red flag.

In 2009, the court decided to order TSE to pay damages of approximately 10.7 billion yen and delinquency charges. In response to this ruling, Mizuho filed an appeal.

In upholding the 2009 ruling, the higher court accepted that Mizuho should shoulder at least 30% of the blame for the incident due to failings in its trading order management system.

On 18 December, 2009, TSE made a payment to Mizuho of 13.2 billion yen, including delinquency charges up until that date, in respect of the court ruling.

In 2006, around 50 securities firms agreed to hand over Y20bn in profits gained from exploiting the fat finger trading error to a fund used to improve the TSE's dealing platform.

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