Slashdot Mirror
A $251 Million Typo
theodp writes "A Taiwan stock trader is jobless after a typo left her company looking at a paper loss of more than $12 million when what was supposed to have been a small order mistakenly resulted in a $251 million purchase. 'Something like this is difficult to explain to superiors,' a company exec explained."
Hmm, I don't think a simple "whoops" would suffice here ;)
She gets fired, and they keep the stock as they expect to profit from it...
Why is she getting fired and not trained?
AXJZTOS
you know you're having a bad day when...
Interestingly, the article mentioned nothing about implementing safeguards to make sure the incident didn't occur again. Surely a simple pattern recognition system could have caught the fact that she was making a trade way in excess of her usual limits.
i read it a few days ago in a newspaper... honestly, how can slashdot be this slow ^^
and they mentioned in the article the stocks were doing pretty good, so they're not gonna dump them immediatly, might even bring a bit extra profit to the company ^^
What's even harder to explain is how 1 person from 1 keyboard has the power to kill a company. Do they have to seize the moment that desperately that even a simple check cannot be done?
see a Text Widget
Now there's a typo.
And they're keeping the stock, while firing her?
That sounds wierd.
I don't read AC A human right
This is somewhat confusing to me - wouldn't a stock firm have some software (if this is an electronic transaction, which it appears to be) with a CONFIRMATION PAGE or something? Or warnings on massive orders? This just seems like a basic 'good design' feature to me...you can't particularly blame the individual here, it is just her random misfortune to be the one to have made that error - if not her it would have been some other employee.
'Something like this is difficult to explain to superiors,' a company exec explained." ..
* "Where is that 'undo' button?"
* "I think I might take my lunch break now..."
* "...MUMMY!!!..."
* "#*#@(!!!!...now stay calm...breath 1 2 3....$(#(#$*$!!!
* "Urmmm....'Oops?'"
This story is so short on details that it's hard to comment, but when I compare
A Taiwan stock trader mistakenly bought $251 million worth of shares with a misstroke of her computer keyboard
to
Fubon said that the trader was unfamiliar with new computer systems,
I wonder if I missed a revolution in keyboard technology that made it impossible to adapt to "new systems" quickly?
This article is about Huong Tee, who was just fired from a New York Stock Exchange broker earlier this year for doing the SAME thing with Mutual Funds. Same explanation was given, although the NY Financial Times said something about foreign exchanges being a potential target for this next, and what do you know here it is.
This is called a eastman scam BTW, named for the person who did it first with two international markets.
The article does nothing to explain the international tie and why this exploit is being done. It has to do with currencies and values of multiple companies in multiple markets simultaneously. There were probably 20 other stocks involved at a smaller degree.
What is this - dumpest investment bank ever? * They let a trader onto an unsecured system without proper training (unfamiliar with computer system). * The system is ocnfigured/programmed in such a way that there are no max trade orders, no security precautions, nothing at all in place. What is so hard to explain here? I was dump, I did not make sure my trader was property trained and the system we ordered lacked any fundamental security precautions. Poor trader - a dcase of a software/management fuckup and he has to pay.
A job at a Taiwan firm: $50,000 USD per year (Converted)
An order placed by said firm: 12 million USD (Converted)
Making a typo and putting every exec, and just abotu every other worker's kid in the ordering company through college: $251 million USD (converted). For fixing your mistake, and everything else, there is MasterCard.
(Note: 98% interest fees apply on all orders over $250 million).
How unfortunate that everyone isn't held to the same high standard.
They wanted more stock than what they were allowed to trade for. Its announced as a typo, she takes the fall, later down the road gets a big indirect pay-off. Real phishy to me. We are all aware of "Are you sure you want to continue" pop-ups.
Looks like a company to never do business with. The article implies that they had a new computer system and didn't train their employees. Uncertainty in the new program caused an incorrect purchase, resulting in their loss. Rather than fix the problem by educating their employee(s), they fire the employee that made a typo.
Sucks that such a costly mistake was made. Next time maybe they should ensure that their employees know what they're doing before putting them live on trades.
Y/N
I wish we could have purchased our own office supplies online instead of having to ask purchasing to get us some pens.
You're fired!
eTrade SUCKS
* 'Oh..I feel like such a n00bie...'
/. to make the situation better?
* 'That was not l33t..'
* 'You're not going to frag me will you?'
* 'Shall I post our URL on
I've worked in market data systems for years. I can see how someone unfamiliar could flub an order. Inexperienced staff are typically be put on a rather short leash (ie. system madated spending limits and such). It would be a shame if she were the only person to lose her job over this. There are (or should be) a host of people responsible for making sure this sort of thing doesn't happen. Seems some of them should be sacked as well!
The cnet article claims the company plans to keep the shares.
Not so. Here's the official press release.
Fubon Securities settles stock trading error in timely fashion.
Under the fundamental principle of not affecting the local stock market, Fubon Securities today smoothly unloaded all NT$7.7 billion worth of shares it mistakenly purchased yesterday for a client by inadvertently keying in an incorrect figure, with its own dealer department absorbing some NT$5 billion worth of the shares unloaded. The company will properly adjust its shareholding positions based on market conditions.
Fubon Securities said that immediately after the undesirable error occurred, the company activated its crisis management system and sold off NT$800 million worth of shares yesterday. The firms crisis-handling panel, under the principle of minimizing any possible impact on the local bourse, smoothly unloaded all remaining positions in mistakenly purchased shares today, with some NT$5 billion worth of stock certificates in 230 issues taken over by the firms own dealer department. Judging from todays performance in the local stock market, the massive corrective operation did not in any way have negative impact on the bourse.
As investors are concerned about the impact of this event on the earnings performances of both Fubon Securities and Fubon Financial, Fubon Securities reports that total losses ensuing from the stock-unloading operation did not exceed NT$470 million and were equivalent to the firms total pretax earnings recorded in the first five months of the year. If including the increased earnings in June caused by an upturn in stock turnover, Fubon Securities earnings for the first half of the year will still surpass those of some other local brokerage houses. The firm is still guardedly optimistic about its overall earnings record for the full year, based on prospects for the economy in the second half of the year.
Of course, all those numbers are in Taiwan dollars...
I just feel sorry for the woman who lost her job because some idiot forgot to make a big, red "WARNING" page in software that important.
Where is clippy when you need him?! "Hi, it looks like your trying to buy a quarter billion dollars of stock! Can I help? I suggest MSFT instead."
I read the article and noticed the Company name - Fubon - now Fubar'd
Here's how i would have designed the application...
Warning: You're about to spend $251,000,000! That is a lot of Fucking money! Are you sure you wish to continue [OK] [Cancel]
Hey now... I know you said ok... but that really is a fuckload of money.. are you serious about this purchase? [OK] [Cancel]
Ok... But don't say I didn't warn ya. Please press the OK button 50 more times to confirm or Cancel if you change your mind [OK] [Cancel]
Seriously tho.. $12 million in losses... Why not fire some programmers while you're at it.
-- Knowledge shared is power lost. -- Aleister Crowley
D'OH!
and ended our civilisation as we know it, provoking a stock echhange collapse like in 1929 and the rise of some democratically challenged leaders. Quite offtopic, makes me think that we haven't had a forties revival yet.
Google passes Turing test : see my journal
I'm telling ya. That was "Deep Throat." It's all about selling the new book! 8)
great words...
"It's my first day"
"Tread softly because you tread on my dreams"
There should be a set limit that certain people with certain authority can do. Such large purchases SHOULD require approval by a superior.
If you like what I've said here, and want to read more, go to http://www.krillrblog.com
I just don't believe you could do this by mistake. What if it's a scam, surely worth losing your job over a slice of 250 mil.
"Don't belong. Never join. Think for yourself. Peace." V.Stone, Microsoft Corporation
A friend of mine once managed to completely trash a database and accounts server by entering rm -rf * from the root folder, without entered the requisite cd to the correct folder. Yes he was logged on as root and couldn't stop the inevitable until he pulled the power cable. His company was smart and went after the fool who gave him the procedures and let someone who basically knew fsck all about UNIX loose on the root account.
Sounds like this company needs to do the same and write some proper procedures and find some way of checking input. Humans being fallible and all, firing someone making an honest mistake, especailly when they don't know the system does seem a little excessive.
Fouled up by one number, perhaps?
Bart Simpson would say, 'I didn't do it'.
Let the commencement BEGINULATE!
Whoops!
"'Something like this is difficult to explain to superiors,' a company exec explained."
I propose laying off those superiors instead, as they have trouble understanding something that can be quite easily explained in a slashdot summary...
This space is intentionally staring blankly at you
They have someone in a position to cost the company so much money, yet they don't have a peer review system setup, for purchases say oh.. over a few milliion dollars? Sounds like a system failure blamed on someone being only human to me.
Good thing that the average slashdot commenter is not a stock trader. Would become very expensive.
This article exemplifies teh improtance of company culture.
For several years I worked for a US bank with the highest possible bond rating. Though smaller (at the time) than the national banks we all think of today, this bank was well known for its culture of prudence and the quality of our lending.
Why is this important? Because it rolled right over into the IT departments. From suppliers to product purchasing to in house software, everything was done very much "by the book" and we didn't care if we weren't doing things the latest and greatest because we wanted to do things right. And yes, our banking systems had limits on everything so a junior banker could never make a $1,000,000 loan by misplacing a decimal.
It contrasted sharply with my stint in a dot-com where things were fast, furious, and being "by the book" was laughable. Cutting edge might have been cool then, but the bank I worked for is now one of the nations largest, and the dot-com is a dot-bomb.
I only came here to do two things; kick some ass, and drink some beer...looks like we're almost out of beer.
is it just me, or does this seem like something straight out of a cartoon? one misplaced keystroke can be this costly? when YOU make it this easy to screw up, it's YOUR fault. esp if you are not training your employees properly. reminds me of the episode of simpsons when homer used a drinking bird toy to press y to vent the reactor.
type-o allows suspect to go free
Slashdot at its best. Look, if you fuck up so badly that you cause your company millions of dollars in immediate losses and expect the people in charge who enabled you to fuck up (not the ones who actually fucked up, because that's you) to take the responsibility for you instead of you, then you're a fool.
Are there going to be policy changes because of this? Of course, duh (and by the way, the article says that). Should there be recriminations for the people involved who allowed this person to do what was done? Yes, and there almost certainly will be, even if behind the scenes and out of sight. Should the person who screwed up be allowed to continue? Of course not; given the power to make such transactions they failed in a grotesque manner.
Is this person helpless? Is she unable to fend for herself in the world? Is she not responsible for her own actions, positive or negative? She did something, she screwed it up in a major way, and she should suffer the consequences of it. Other heads will roll, but before you chop the heads off of the people who allowed someone to do something massively stupid, you first fire the person who actually did something massively stupid.
I mean, really, this is kind of silly. Do you think that this person was authorized to make penny (well, whatever the Taiwanese equivalent is) stock purchases and accidentally typed six or seven more zeroes? No. Obviously this was someone authorized to make major transactions. She, unfortunately for her, accidentally made a purchase even more major than she had intended. You can blame procedures and software and management all you want, but do you really think that someone authorized to make major transactions shouldn't be really, really careful about it while doing it? And if such a person isn't, are they blameless?
Donald Trump: You're Sued!
"Victory means exit strategy, and it's important for the President to explain to us what the exit strategy is." G.W.Bush
If the "new computer system" allowed such an oversight by as much as a keystroke, the system developers failed to safegaurd such anomolies. It didn't say which stock market this happened in, but if I were the company, I would be filing an appeal on the transaction. At least in the FTC, it's their responsability to preserve the integrity and fair market structure.
Say what you want about unions, but as long as we have companies who treat people like this we need to have something to protect them.
(I know this happened in Taiwan, but I'm they would have been sacked in many other countries as well).
Microsoft keyboard dirver bug!
Sue them!
Your ego is Matrix!
Nelson: HA HA!
Ubuntu: If at first you don't succeed, blindly slap a sudo in front of it
In other news, a secretary at Microsoft (MSFT) accidentally uses decimal in wrong place and purchases 3/4 of the US military. Accidentally.
Digital Sailor
"There is a paper loss of more than $400 million (in Taiwan dollars)," the executive said.
"However, with a good outlook for stocks in the second half, there are no plans to sell the shares in the near term."
So do you WANT the shares or not? Sounds like it's not a loss after all.
Personally an employee who has made a $400mill mistake is worth keeping. They're sure to work like a slave from now on.
Oh yeah. Yeah, sure they did. Smoothly unload $12m USD without affecting the market for that stock? Obviously possible. Of course.
I've written front office trading apps for a few banks. To not have trader limits auto-enforced is astonishing. Bordering on the (literally) unbelievable.
...life sure sucks in Taiwan
HAHAHA.. I love it. Actually I would have loved to make this mistake. I could tells my friends about it. "I'm the person who made the $251M typo.." It's laughable..right?
Eg, You wish to delete 2,432,495 rows of data. To continue, enter the number of rows:.....
Boris.
As the case of Barings Bank, which was wiped out after 233 years of business after it gave Nick Leeson a bit too much trading authority. It only took a couple years for Leeson to run up losses of $1.3 billion on the futures market.
s html for more details on his story.
See http://www.bbc.co.uk/crime/caseclosed/nickleeson.
this article claims it's only $223 million; a few more details here but not much. Nothing about a revolution in keyboard technology though.... This all sounds fishy, or at least incomplete.
Bank web sites suck. All of them. Especially USAA's, if you have the displeasure of using that one.
Tip to would-be bank websites: disable the autocomplete feature on the "Amount of funds to transfer" field. Nothing sucks like a web browser adding an extra 0 to your transfer. For that matter, disable autocomplete on all fields relating to money.
About a week ago, someone my businesses' bank transferred 180 million dollars into our operations account. I have screen shots of the
online banking screens showing the balance.
My office manager spotted the amount and send me email stating that "all our problems are solved"
The actual amount transferred was 180008419, which happened to be the number from another account we held at that same bank.
The interest on that amount for the two days it was in our account was something over $22k and while the bank eventually removed the 180 million from our account, they still have not removed the interest.
I believe these errors happen more frequently than we know.
More surprised that it doesn't happen more often.
EvilCON - Made Famous by
Having just done lots of risk-analysis reviews on multiple banking application, I cannot understand how a company doesn't employ a 4-eyes principle for any transaction above 10 Million, and needs a manager release for above 50 Million.
Eurex is fine, but when the staff using the application is limited, you don't get separation of duties or rotation of duties, and you can still be faced with a setup where 1 user has too much power.
Sure she just lost $251 million...
;)
or...
The company just spended $251 million to educate one of their employees.
Why Fire the employe with the most expensive education...
I completly agree, different levels of authtorization based on the amount of transfer.
To me the end-user didn't create the problem (sure she made a type, it happens), but the procedures and the risk-management are at fault here. Her head should not roll, it's her bosses, the risk-management heads etc...
But seriously, remember the virus that made you agree to a T&C before it installed itself? In the T&C you agreed to let it wreak havoc on your PC and mail itself to everyone in your address book. And people just blindly clicked "okay" because they're so used to the T&C's and EULA's being these complex documents full of legalese that it's pointless for them to read because they wouldn't understand them anyway.
- Greg
Start a happiness pandemic
She made a mistake, but now that she has she's much less likely to make that mistake again. She's the ideal person for the job. I seem to recall some story where the guy who invented the light bulb had a boy carry up to this place to be presented to whoever and he dropped it and it took months to remake. When it was remade the inventor let the same boy carry it, saying that that boy was the least likely person of all to drop the lightbulb now, after his previous mistake. People make mistakes. It happens. Blaming people for the sake of it is just childish. Things like this are just witch burnings, to satify the "outrage" of other people, who by the looks of it must have never made a mistake in their lives.
This guy are sick.
Recently, some person in the states of Jersey here made a mistake and did something like paying every worker £6 million because they got the decimal point wrong. They got all the money back (if i got paid that much money i'd have fucked off with it) but several people got fired for it. I was working there at the time, so i tried to gather who got fired for it, but mentioning it gave similar reactions to the ones the people on harry poter gave when someone said "voldemort".
This sort of thing happens quite often in currency trading. Since trading desks are real-time, prices entered manually, and the markets can move a lot, very quickly, there are very few checks that are applied. Traders aren't the sort who'd click on "Are you sure?", anyway.
The primary fault lies with the developer who failed to adeqautely validate input. Data validation means more than just making sure you don't have an alpha character in a numeric field; it includes sanity checking to make sure data are within reasonable ranges, and requiring additional confirmation (ranging from "Whoa, dude! That much?" to supervisor approval) when input is outside that.
http://alternatives.rzero.com/
He just pressed the wrong key.
This type of decimal place error is called a "slide" error by accountants. If she had accidentally gotten the order of the numbers wrong, it would have been a "transposition" error.
OK Cancel dialog boxes are bad. They are only used because some OS and platform vendors made them easy, and most programmers are too lazy or unaware of interface design to do it correctly. Any decent desktop platform should make the call:
dialogbox(introduction, button1text, [button2text, [button3text, [...]]])
The platform decides the height and width of the dialogbox and the buttons based on the contents. Button placement is decided by the button texts: if several button texts are short, they are placed in a horizontal row. Return value is the number of the button pushed.
This makes the platform simpler with only one dialogbox function for any number of buttons. It encourages developers to make the buttons meaningful. And consumers read the buttons rather than "click OK" because every dialogbox is different.
Bad:
Are you certain you want to give away $1 million?
[OK] [Cancel]
Good:
[Give away $1 million]
[Let me try something else]
I spend my life entertaining my brain.
With no plans to sell the shares because of a good outlook of the stock...
.02$ worth... (.66666$ in Taiwan dollars according to ratio in article)
1) what stock?
2) they still plan to profit in the end...
3) girl still fired for doing her job with bad safeguards...
You gotta remember, the losses are on PAPER... that means the current stock price, etc...
She bought " $251 million worth of shares with a misstroke of her computer keyboard, meaning her company is looking at a paper loss of more than $12 million " Not bad... only a 20% loss... Not bad for a first trade... I know some folks that have done worse just because of the Enron stock scandle...
But the secretary will be still fired even if it turns into a 12 million profit in 2/3 days...
just my
--- Relax, that mass muderer is just trying to reduce our carbon footprint, one fetus at a time...
Human genome = 3 billion base pairs = 6 GBit. Windows + Office = 20 Gbit. Which is more impressive?
I love the way this stuff gets translated. "Fubon Securities today smoothly unloaded"... "Fubon Securities said that immediately after the undesirable error occurred"..... "If including the increased earnings in June caused by an upturn in stock turnover"...
I can kinda see how this happened
Please enjoy happy stock trading software. This softwareis under strict quality contril with perfect packing when leaving factory. I has been created with highest quality. Software is not a toy. Except using it, please do not use it as other application....
For other jewels see Engrish.com
-B
Back when I was working at a university my pay check was miskeyed. We received checks late on Friday. Guess they liked the extra float. I phoned the payroll office and was told, quite rudely, that I'd have to wait until Monday for a corrected check.
"No problem, I'll just deposit it and refund ther excess when I have time".
"Err, what sort of mistake did we make?".
"About $116k in my favor".
I had my correct check in less than 10 minutes!
Payroll folks had a much better attitude for years...
You're correct in that at this point it's only an unrealised or, as you put it, paper loss.
But there is also Opportunity Cost to consider; the benefit forgone as a result of pursuing one course of action rather than an alternative course of action.
They are planning to hold the securities, but we don't know their cost of capital (aka their borrowing rate, important as it's likely this is a leveraged positiion). Nor how much capital this particular trading desk has to play with; the amounts involved may in fact be a large percentage, in which case just by holding this position they won't be able to acquire other, perhaps more profitable trading positions.
We also don't know much about this particular trading desk, their style. Are they monentum traders? Was this particular position one leg of some complex arbitrage?
Their losses could potentially be much, much larger and the impact immediate. It's pretty bizzare that they are planning to hold a position 20 times the size of the one they originally planned to take on. That's gotta really unbalance their overall portfolio.
I've worked on trading desks and these mistakes happen a lot, far more often then most folks realise, and rule number one when you make a mistake like this:
Unwind the position immediately!
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They just spend 251$ on her training... and then they fire her... they must be crazy.
If the order confirmation page had asked:
"You have ordered one hundred thousand of XYZ stock. Is this correct?"
Instead of:
"You have ordered 100,000 of XYZ stock. Is this correct?"
Would you have made the same mistake? One hundred thousand is much harder to mistake for ten thousand, then 100,000 is to 10,000. And thats a simple idea a university student just thought up. Software engineers for this type of software really need to be held legally responsible like real engineers are.
========
CINC, 4th Penguin Legion
Here is a really funny story (german link):
f inanzen/steuererklaerung/steuerbescheid_tippfehler .jhtml
http://www.wdr.de/themen/wirtschaft/oeffentliche_
A local tax bureau made a typo in entering the tax data for a 70 year old retired man. He had declared 11000 as income from stock and later found out it was really 17000. The lady from the tax bureau typed in 1100017000 which is one billion german mark. Accordingly, the man got a statement asking him to pay about 100 million euro taxes. He contacted the tax bureau and they recognized the error, but in the same time charged his bank account already 10 million euro. The man got a lawyer to write a nice letter to the office.
Since in germany, lawyer payments are calculated in terms of the amount which is disputed in the case, the lawyer's fee for writing this letter amounted to 2,3 million euro, which the office was to pay. They refused, but apparently they now had to pay the lawyer 500000 euro, lately.
Require the person to enter the amount in words as well as digits (just like in a personal cheque).
So now you're going to require them to know how to spell as well as trade stock? If their employees have the spelling skills of most Slashdot readers, their work would NEVER get done...
"Let's see - buy 100 shares...Wun hundert...One hunderd...On hunndred..."
That's where they got the video of the guy smashing his monitor...
Denver Isuzu Suzuki
"It's my first day"
- Homer
I wonder if the user interface was in Chinese. In Chinese, the characters for buy and sell look similar. Yes, a Chinese person could easily tell them apart, but I can understand that after many hours of staring at a computer screen, one's eyes or brain might get tired and slip up.
To add to the confusion, their pronunciation differs only in tone! When I was younger, I once asked my dad to sell my HP stock. He misheard me and bought some instead. I'm sure that this is not the first such misunderstanding that has occurred in Chinese.
I double check a f'ing $20 order to amazon.com
This is inexcusable.
Wow. You're a jackass.
Sherman McCoy, hapless protagonist of Tom Wolfe's Bonfire of the Vanities , suffers a similar fate.
... while juggling his mistress, his wife, and a host of other crises.
He's brokering a multi-million dollar deal involving French gold bonds
In the middle of the all-important deal-closing phone call, he loses track of what's what, offers a buying price an order of magnitude too low -- the deal is done, and it's a multi-million loss for his firm.
-kgj
-kgj
This sounds like a transaction was made that was larger in net worth than the company that made the purchase. Excuse my very poor financial jargon, but if Company A buys so much stock in Company B that it would impact the entire company bottom line... well, it seems pretty clear to me that you don't need to go through the trouble of that much oversight. You just need to instruct the software to not allow trades over a certain value, especially values that would bankrupt the company.
if ($trade > $value_of_our_company) {
die ('You goddamn MORON!');
}
I8-D
"Ok! Ok! I must have, I must have put a decimal point in the wrong place or something. Shit. I always do that. I always mess up some mundane
detail!"
But honestly, it's Peter's fault, because he is 'a very bad man'.
I work at a bank as a sorter operator (deal w/ documents encoded by encoders with the amount and other necessary information, run them though a machine, key in rejects, make note of encoding errors, get them out for federal processing, various other paperwork), and there's a lot of possiblity for errors. I've never seen any as bad as $270M, but it is pretty easy for the unskilled to type in an extra "00" when doing high-speed unchecked keying of data (which does lead to termination if errors aren't within quota). I would think they would have a safeguard system in place to prevent it, because if we had anything that abnormally large, it would be noticed....
In undeveloped countries, the consumer controls the market. In capitalist America, the market controls you.
This happened to me once. That is, I mistakenly bought ten times as many shares as I intended. I noticed it within a minute or so, and sold it off (at a tiny profit), but my nerves were frayed there for a while.
the title says it all.
I have also seen an electronic trade that wiped about a couple of hundred million off the German exchange. Some idiot decided to sell 5000 DAX futures at 5 rather than the other way round. Of course, they had disabled order checking in their system It wasn't just the bad trade, it was that the trade went through the order book hitting all the stops. With a panic, the trade hit the cash market as well and brought down the main index by about a thousand points.
See my journal, I write things there
Probably this is just a trick by a Merrill Lynch publicist, who found a way to get free publicity. Or, maybe it is a way to distract people from some fraud involving the Taiwanese firm and Merrill Lynch.
Otherwise the story just doesn't make sense. To believe the story, Fubon cuts loss to NT$50 mil. in NT$8 bil. mistake, as it was written, you have to believe that the Taiwan firm hires inexperienced people, gives them little training, and does not review their large trades.
Do you really believe that a low-level employee spent a quarter billion dollars because of a keystroke error? In any case, the people who should know don't believe the story. Shares of "Fubon Securities' parent firm Fubon Financial Holding rose by 0.47%".
According to the U.S. government's SEC department, corruption of the media is not the only corruption from Merrill Lynch: SEC Charges Merrill Lynch, Four Merrill Lynch Executives with Aiding and Abetting Enron Accounting Fraud.
The U.S. government's Justice Department says, Three Top Former Merrill Lynch Executives Charged With Conspiracy, Obstruction Of Justice, Perjury In Enron Investigation.
There is general agreement that there has been no serious change in the U.S. government and big corporations like Merrill Lynch and Citibank. Apparently the only change is that they will be more careful in the future when they engage in deceptive practices. For an example of what has been written about this, see Iraq Could Produce Another Enron, by Nomi Prins. Ms. Prins wrote an excellent book about corporate and government corruption in the U.S., Other People's Money. At Powell's: Other People's Money.
Apparently most of what is written about the financial markets is fradulent in some way. Generally it fits into the category of "What we want you to think so that we can make more money". Employees and investors in the U.S. have lost billions of dollars due to fraud in the last few years.
The corruption is extremely widespread. Here are short reviews of 35 books and 3 movies about conflict of interest in the U.S. government: Unprecedented Corruption: A guide to conflict of interest in the U.S. government. (To those who think there is little or no corruption: If you can't give any example of a book or article you have read that supports your view, please consider not commenting this time.)
A brochure I was working on just after the introduction of the Euro included a government ministers pledge on funding amounts in a sector. He had intended to spend 65m euro but since the font was changed at the last minute to a font that didn't include the euro symbol it defaulted to a 1. I therefore raised his budget by 100 million & left the country shortly thereafter
This incident has ignited a tremendous controversy in Taiwan. Some people are speculating as to whether another Nick Leeson could exploit the structural weaknesses which led to this incident. The woman involved, a Miss Hwang, was an experienced professional who regularly handled large sums of money. Her base salary was quite low; most of her income was based on commissions for large transactions. For every NT$100,000,000 (divide by 31 for US dollars), she would receive a 3 to 5 thousand dollar commission, so she probably made up to $1,000,000,000 per month.
We have a secretary who kept fucking up the inventory. She was too busy yapping with her friends to pay attention to what she was typing. All she did was type too fast and put the date value in the quantity field.
I want 20041231 units of printer cartridges
Had to get a programmer to limit the quantity field so nobody ever ordered more than 100 of anything.
1. Purchase a large quantity of a particular stock.
2. Publicly announce, via several news sources, that it was all a horrible mistake.
3. Fire someone, just to make the whole thing believable.
4. Wait for millions to short sell what they assume is now a horribly overvalued stock.
5. Profit!!
___
It's the end of my comment as I know it and I feel fine.
I thought people were aware of this concept already. How could a company let a mistyping result in a $250 million loss? Obviously their system/management/etc. is poorly structured.
For he today that sheds his blood with me shall be my brother.
Make sure one-click^H^H^H^Hkeystroke purchases are effectively disabled!
I work in a major international investment bank, on their online foreign exchange, bonds and derivatives trading system. I work on the technology side of things, so obviously can't do any trading myself. However, you'd be surprised at how easy it is to screw something minor up, and cost the bank or its clients a large quantity of cash.
Entertaining anecdotes include the time I shut the production system down during the day; the time I forgot to enable automatic orders; the time a colleague re-ran a whole day's trading through the system; or the time another colleague connected test prices to the production system (anyone want to buy GBP for $US1.10?).
In fact, we had a situation where a client made a similar error to that in the story. They intended to purchase EUR10,000 worth of some bond or other, but mis-interpreted "Mil", short for English "million", as being short for the French "mille" (thousand), and bought EUR10,000,000 worth. By the time they realised what had happenned, they had already lost well over EUR10,000 on the transaction.
Fairly often, some client or other doesn't notice the "Mil" at all, and types in something like "3,000,000" instead of "3". An order for EUR3,000,000,000,000 of some bond tends to stand out though, and doesn't get filled, which is good...
Ah, the laughs we've had!
Hey! I only have one good eye, you insensitive clod!
That is all.
...stupid typos...d'oh...
IBM once had a sales rep who made a $20M mistake. He figured his job was up. He was told "Fire you? We just spent $20M on your education!"
Damn, that's the most insightful thing I have heard this year. That's a manager that has a pretty good grasp of the big picture.
Glonoinha the MebiByte Slayer
"not when your supervisor gets back from lunch."
Reasonable business rules require approval for unusual actions, such as trading above a trader's normal range.
Reasonable business rules require that authority to approve is delegated in the absence of the usual person. There's *always* someone available to approve the trade.
It doesn't matter if it's a $250,000,000 trade or an order for 25 pizzas, unusual activity should be checked with a second person. Such procedures should be standard, and if properly designed, not get in the way.
You anti-money commies are so cute. Can I fuck you?
Can I Fuck You?
Wish you were her(e).
when you see the word 'Linux', drink!
Not as bad as typing 'rm -rf /' instead of 'rm -rf ~' though :)
One needs to utilize human being's strengths. How about color coding in the decimal blocks.
w > dollars. Have enough space between numbers and blocks of numbers for the eye to easily read.
Example: <blue>100</blue>,<red>000</red>.<yellow>00</yello
I once made a typo in a routing configuration, and took down every major online trading site, as they were unable to get their stock feeds for a few mins. :)
I also took down the online voter registration system for certain state during the elections. Oops.
Needless to say, no one was too pissed. Although that first one cost about $500,000 of SLA payouts.
I would have fired her too. I would fire anyone who's not able to use a keyboard, or doesn't check their input twice, especially when they are responsible for huge amounts of money.
Are you a freaking asshole or something? A jerk?
wtf? Did you get similarly mistreated or something, now you want to fuck up others' lives?
It was a mistake, nobody died, people didnt starve. It already happened. The company should deal with it.
It was an honest mistake.
How far up does the blame chain go? What about the person who hired her? Should he/she be fired for hiring someone who "can't use a keyboard"? What about the person who hired the person who hired her?
What about the person who sat an untrained employee in front of this system?
What about the software designers who didnt put fail safes against this? Or the people who designed the business process?
People make mistakes without malicious intent, effing deal with it!
They should fire whoever created their trading system. Years ago, a lone operator broke the Barings Bank. Things like that should not be possible. So, who wrote their system? Microsoft??? Sorry, I tried to resist that one really... ;-)
Oh well, what the hell...
Hmm, I don't think a simple "whoops" would suffice here ;)
Maybe it doesn't, but I am surprised that it was that easy to do. You would have thought that the software would have a double check procedure or that anything above a certain amount would require your superior or a collegue to confirm it. Another simple approach would be to have the "are you sure" request display the amount in both figures and words. For example:
Are you sure you want to buy 251 000 000 USD (two hundred and fifty one million US dollars) worth of 'no cash co' stock?
Jumpstart the tartan drive.
That's what sums up this whole article, and if she is going to be that unconcious when dealing with $251M when will she ever be careful enough for a financial job?
Do you really think a finance company this big with this non-intuitive set of software would make a job listing without requesting computer proficiency as at least a +? In a day where most of the managers of a company have about half the computer proficiency of their adolecents, who wouldn't lie about being capable of handling computers?
I dont know if this lady lied to get her job, but it seems the circumstances indicate that, and lieing to gain employment is a good way to get fired.
"And we have seen and do testify that the Father sent the Son to be the Savior of the World"
1 John 4:14
There are lesser punishments than outright termination. A 30 day unpaid suspension, for example. And perhaps a suspension should also be arranged for whoever was responsible for the deployment of a system that didn't make it difficult to make this sort of costly mistake in the first place.
This is a meaningless gesture, and that will not improve the long-term quality of the organization. Discipline should not be applied with the axe, but the scalpel.
//Information does not want to be free; it wants to breed.
She's not just some overworked secretary. This makes it clear why she was fired.
From the article: "However, with a good outlook for stocks in the second half, there are no plans to sell the shares in the near term."
So they're going to end up making money on the mistake and she gets fired for not being trained up on a new system...
This subject is important. Tens of thousands of employees and investors have lost their entire life savings because of the corporate fraud in the United States. If the corruption isn't stopped, it can happen to you.
Anyone who reads some of the books about the Enron fraud and the WorldCom fraud and the Tyco fraud, will learn that the fraud is accomplished partly by deceptive trading. It is not only the authors of the books who think that Merrill Lynch was involved in deceptive trading; the SEC and FBI think that too, as the links in the grandparent comment, to U.S. government web sites, show.
Look at this quote from the linked article: "Chen Ming-tai, TSE president, said Fubon dealers made the mistake by injecting NT$7.7 billion from one of their international clients [Merrill Lynch] into the market to purchase various stocks issued by 282 companies at the highest prices of the day."
Who selected the 282 companies? If you have read the books about the fraud, it is easy to guess that they were all losing Merrill Lynch investments that the company wanted off its books. That's only a guess, but it is an educated guess, given what has aleady happened. On the other hand, it is not easy to understand some of the deceptions. Sometimes investigators have required months to uncover the sneaky behavior.
Look at this quote from the BBC article linked in the grandparent comment: "A Taiwanese stock brokerage that mistakenly bought $255 [Million U.S. dollars]..." That is more than a quarter of a billion dollars! How is it possible that the financial instruments of 282 companies can be selected by one keystroke error? How is it possible that someone who was "unfamiliar with the company's new computer trading programme" could spend $255,000,000 with a single keystroke error?
A situation has been arranged in which we are not allowed to know the name of the employee who supposedly made the error. My guess is that the employee on whom this is blamed is not aware of any error. That would mean that this could easily be a story invented by his managers.
If you read the books about the frauds, you will read about literally hundreds of deceptive practices such as the one I am suggesting here.
Many people in the U.S. seem to want to be ignorant and stay ignorant about the corruption, as is seen by reading some of the responses to the grandparent comment.
Possibly his boss was pretty glad, after all these years, to finally being able to say that famous phrase :)
There's an old saying - "If it sounds too good to be true then it probably is". People should stop looking to the government to bail them out when their greed gets excessive. If you invested in Enron and got burned, I feel bad for you, but I don't really think that it's a federal matter. We have 100 years of market data that suggests that anything over an 11% return is risky. So just because your broker or the company CEO tells you that they're going to make you millions of dollars, you have to turn on the common sense filter to see if it's right. This is why I didn't buy Netscape or Enron, and have no plans to buy Google. I'm thrilled with an 8% return on a stable issue rather than a 100% return on an unstable one.
Don't get me wrong - I don't think that we shouldn't indict people who cheat the system. I'm just saying that a con artist is only as good as those people who are willing to trust them. Anyone who has been swindled has to accept the fact that they were a willing participant in the scheme. Once you're willing to admit that you were wrong, then you'll look at future "opportunities" with much more discretion.
If you don't want crime to pay, let the government run it.
http://bash.org/?5300
<tatclass> YOU ALL SUCK DICK
<tatclass> er.
<tatclass> hi.
<andy\code> A common typo.
<tatclass> the keys are like right next to each other.
Who do you not blame? HR for hiring "incompetents"?
or funny...
4-eyes principle
So, only people with glasses are allowed to deal with large sums of money? Isn't that rather discriminatory? Understandable, but discriminatory. B-)
"I'm not impatient. I just hate waiting." - My Dad
They bought the stock regardless. I would doubt anything but error, in the clearing house, would warrant refund. Considering that all the stock houses are interlinked and international, there is no forgiveness for an error. The bigger question is WHAT they were buying that the executives think is worth holding to mature. Is this purchase advertised as an error to conceal a market trend? It is known fact that companies violate copyrights, patents, trademarks, generally any intellectual property when they want to transfer funds.
without prejudice
Maybe you want to explain exactly who is benefiting from this mistake, or purported mistake, or even demonstrating the smallest sign of something besides syphilitic dementia before throwing accusations around.
Your posts are nothing but arm-waving and obfuscation. But of course anyone who disagrees with your brilliant exposition is automatically ignorant.
(Or could it be that you're 100% unconvincing?)
How did Merrill Lynch benefit? And how is this, therefore, corruption? No hyperlinks to something about Enron. No hyperlinks to something about WorldCom. No hyperlinks to something about Tyco. No hyperlinks to dubious movie and book reviews. How is this situation, this one, here, now, FRAUD?
Answer the questions, chuckles.
They've stopped giving the secretary shit about the time she left the coffee pot on all night.
This wasn't a "12 million" error. It was $255 million dollars!
Look at this quote from the article that was linked in the comment above titled, Stop the corruption, or you will lose money, too": "Chen Ming-tai, TSE president, said Fubon dealers made the mistake by injecting NT$7.7 billion from one of their international clients [Merrill Lynch] into the market to purchase various stocks issued by 282 companies at the highest prices of the day."
The "mistake" involved 282 companies.
I've made keystroke errors, but that is a keystroke error. "Why yes, officer, I set my drink down on the keyboard accidentally, and bought stock from 282 companies." Where do I get one of those keyboards that does so much work with a few keystrokes? Will it fix programming errors?
Or, it is a lie meant to hide deceptive trading.
Are you sure you wish not to continue with purchase?
[Yes] [No]
Sorry, this sig is beneath your current threshold
NEVER use Market Orders.
Great - you've just fired the one employee you know will always and forever more, triple check everything she ever does.
On the contrary. Fire her and everyone will triple-check their numbers. Don't fire her and they have less reason to.
Kevin Fox
Warning! You are about to trade more than your company is worth! Are you sure?
OK Cancel
----
Are you REALLY SURE?
OK Cancel
General Relativity: Space-time tells matter where to go; Matter tells space-time what shape to be.
should be with the stockholders. They should not be bailed out. They should be liable!
Hey, that's how coins in the USA work, you need to know how to read in English. Why should trading be different?
Copyrights, Patents, Trademarks: temporary loans from the Public Domain, not real property ("intellectual" or otherwise)
5%? I pay 0.3% for large transactions
It's shocking to me how little Americans know about corruption in their government and how the corruption has lowered the quality of their lives.
The U.S. government has weak accounting laws that allow hiding the true profitability of a company. That's how so many people lost money in the Merrill Lynch, Enron, Arthur Anderson (28,000 people lost their jobs.), Worldcom, Tyco, Adelphia, HealthSouth, and many other cases. But most people just don't care, and the U.S. government has still done little but prosecute a few of the most open and obvious perpetrators. No effective, fundamental changes have been made.
From the grandparent comment: "There is general agreement that there has been no serious change in the U.S. government and big corporations like Merrill Lynch and Citibank."
The accounting laws are very weak, and allow hiding deceptive practices. Nothing effective has been done about the fundamental issues.
"Learn to read and comprehend."
It amazes me that people will express extremely strong opinions, and be extremely disrespectful, when they haven't carefully read the comment to which they are replying, nor any of the books about the subject.