The 3 Billion Dollar Typo

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Posted by Zonk on Friday December 9, 2005 @04:08AM from the this-is-why-coffee-is-a-daily-requirement dept.

Rand310 writes "Mizuho, the world's second largest bank based in Japan, with total assets of nearly the GDP of France (around 1.2 trillion USD) accidentally sold 610,000 shares, valued at $3.1 billion... for 1 yen each. A 27 billion yen loss would almost match Mizuho Securities' group net profit of 28.1 billion yen for the financial year ended in March, though... the incident would not threaten the brokerage's financial stability. FYI 1 yen is about .83 cents. Yesterday one share was selling at $5,065, today you could theoretically have bought 610,000 shares for $.0083 each. An expensive switch of variables."

25 of 398 comments (clear)

Would be nice, but not really... by KingSkippus · 2005-12-09 04:10 · Score: 5, Informative

No, the shares weren't actually sold for 1 yen each. From TFA:

No buyer was actually able to pick up the phantom shares for 1 yen due to market rules designed to limit price fluctuations, but the shares may have gone as cheaply as 572,000 yen ($4,750) each, a more than 9 percent discount to the intended sale price.

Selling the shares for 572,000 yen is where the 27 billion yen figure came from, not selling them for 1 yen.

Also...

...you could theoretically have bought 610,000 shares for $.0083.

Aside from the fact that you couldn't have theoretically bought the shares because of market safeguards already mentioned, that sentence is missing a very important word: 610,000 shares for $.0083 each.

Still, it would have been one helluva holiday sale, wouldn't it?

The other thing I thought was interesting was from the other article. It said:

The accidental order was 42 times bigger than the number of issued shares, but a computer warning of the misplaced order was overlooked.

How much yen do you want to bet that it's one of those stupid "Are you sure?" dialog boxes that everyone clicks "Yes" to without actually thinking about what it's asking? Ah, how I love ignoring those warnings, too.
1. Re:Would be nice, but not really... by 110010001000 · 2005-12-09 04:15 · Score: 5, Informative
  
  Yes, but if Slashdot was more accurate it would be less dramatic. The idea is to increase pageviews by posting hyped and controversial "stories" in order to increase revenue. This was probably a policy instituted by upper management to help the flagging LNUX (Slashdots parent company) stock price.
  
  Haven't you noticed that as the stock price goes down, the hysteria on the front page goes up? Anything to make a buck!
2. Re:Would be nice, but not really... by 91degrees · 2005-12-09 04:17 · Score: 5, Insightful
  
  How much yen do you want to bet that it's one of those stupid "Are you sure?" dialog boxes that everyone clicks "Yes" to without actually thinking about what it's asking? Ah, how I love ignoring those warnings, too.
  
  It's a constant grip of mine. I hate unneccesary confirmation dialogs (the result being I hate alost all of them). I can just about tolerate "This will overwrite a file", or "Save before quit" ones, but I keep running across designers who think insist on using modal dialogs for feedback. "You have just pressed a key. OK/Cancel". I make a point of querying this behaviour any time a designer comes up with it.
3. Re:Would be nice, but not really... by fossa · 2005-12-09 04:37 · Score: 4, Insightful
  
  Yup. As others have pointed out, this is yet another usability problem. If one simply mistake can cause so much damage, then it should raise a warning flag. Which it did, but apparently the warning flag was utterly useless. Silly "ok/cancel" dialogs are not enough to cause the user to stop and think about what he is doing. If such dialogs were correctly implemented, they would be extremely annoying which would lead to two things: 1) it'd be much more unlikely to make a mistake and 2) as another poster pointed out, almost *all* such dialogs are for something minor (do you really want to quit??) and better safeguarded against in some other way (e.g. "undo"), and thus would [hopefully] quickly disappear if they must be extremely annoying rather than merely annoying.
  
  Raskin's suggestion for a dialog that would work is something like: "You are about to perform dangerous and undoable action X. If you wish to proceed, type 'Yes, perform action X' followed by the [11th] word of this sentance." You'd be asked to type a different word each time so you could not memorize it and learn to confirm the action without thinking. Highly obnoxious, yes. Hopefully designers would learn to only make use of it when absolutely necessary.
  
  P.S. I'd just like to say that Firefox without the SessionSaver extension is painful. Why on earth isn't SessionSaver included by default? "You have 9 tabs open that took you many hours to arrange. Close them all forever: yes/no?". And if something crashes, you don't even get the annoying dialog...
4. Re:Would be nice, but not really... by jjapan · 2005-12-09 04:49 · Score: 5, Informative
  
  Actually the message box is rather large and declares the error very clearly. In addition it shows the details of what the action will do. Whoever did this really was either not watching or was using the safety net to enable some friends to make a killing. The news here interviewed day traders who made a lot of money on this deal. The blip lasted for about 3 minutes and was jumped on very quickly. The day traders referred to it as a "Christmas present". Investigation going on now. Be interesting to see what turns up.
5. Re:Would be nice, but not really... by maxwell+demon · 2005-12-09 04:53 · Score: 4, Funny
  
  Are you sure you wanted to press the "Ok" button on the "Are you sure" dialog box? [ OK ] [ Cancel ]
  
  --
  The Tao of math: The numbers you can count are not the real numbers.
6. Re:Would be nice, but not really... by Anonymous Coward · 2005-12-09 05:01 · Score: 5, Funny
  
  That's very interesting.
7. Re:Would be nice, but not really... by Anopheles · 2005-12-09 06:33 · Score: 4, Interesting
  
  The ones that REALLY piss me off are the ones for Windows patches. If you install an update that "requires" a reboot, and you hit "reboot later", it will nag you (by popping up another modal box with the same question) every 3 minutes. And there's no "cancel" or "stop annoying me" button. You can't stop the nagging.
  
  What's worse is that the default button on this dialog box is the "Reboot now" button.
  
  So I'll be typing in an email or a posting to something, and after 3 minutes are up, it will suddenly pop up the nagbox into the foreground, just in time for me to hit spacebar after finishing a word. In a blink of an eye, the computer forces every program to end without prompting to save and reboots...
  
  I can understand and can live with crashes. but that... That behavior was PLANNED.
Data Validation by ||Plazm|| · 2005-12-09 04:12 · Score: 5, Insightful

I wonder how many times the person(s) hit "Yes I am sure" when the system was telling them not to do it...
1. Re:Data Validation by Kadin2048 · 2005-12-09 05:26 · Score: 4, Funny
  
  Well based on the photo that MSN decided to run with on its article, apparently people at the Tokyo stock exchange have a special, Solitare-based GUI for doing stock trades:
  
  http://www.msnbc.msn.com/id/10394551/
  
  This image:
  http://msnbcmedia.msn.com/j/ap/tok11012090345.hmed ium.jpg
  
  --
  "Ladies and gentlemen, my killbot features Lotus Notes and a machine gun. It is the finest available."
2. Re:Data Validation by madaxe42 · 2005-12-09 07:53 · Score: 4, Interesting
  
  Actually it's a market depth view. Each column displays the buy and sell side of the market, and the associated depth & volumes.
Hmm... misleading post? by LordPhantom · 2005-12-09 04:12 · Score: 5, Insightful

From TFA..... No buyer was actually able to pick up the phantom shares for 1 yen due to market rules designed to limit price fluctuations, but the shares may have gone as cheaply as 572,000 yen ($4,750) each, a more than 9 percent discount to the intended sale price. .... Mizuho's error has so far cost the broker some 27 billion yen ($224 million), Fukuda estimated. It appears that, in fact, they didn't lose BILLIONS but a few millions. Still large, but the post is misleading.
1 BILLION Shares! Muuuahhahaahahahaha by mpapet · 2005-12-09 04:15 · Score: 4, Funny

FTFA "The sell order, which was more than the available shares, somehow went through the TSE system.

That to me is much more disturbing.

I just wonder who's going to get the blame, IT or the software vendor?

--
http://www.maxineudall.com/2010/02/should-economists-be-sued-for-malpractice.html
You've got to admire the Mizuho execs... by The+Angry+Mick · 2005-12-09 04:18 · Score: 5, Interesting

The company made a horrendous mistake and yet, there you see two executives bowing apologetically and taking responsibility on the day it happened .
I have to wonder how a U.S. bank would have handled such a mistake?

--
I'm not tense. I'm just terribly, terribly, alert.
1. Re:You've got to admire the Mizuho execs... by Valiss · 2005-12-09 04:34 · Score: 5, Funny
  
  The company made a horrendous mistake and yet, there you see two executives bowing apologetically and taking responsibility on the day it happened .
  
  I have to wonder how a U.S. bank would have handled such a mistake?
  
  Well, I can tell you it wouldn't be the company execs who would be bending over...
  
  --
  
  -Valiss
2. Re:You've got to admire the Mizuho execs... by pubjames · 2005-12-09 04:44 · Score: 4, Insightful
  
  We Americans, though, are FAR more concerned with pointing the finger at someone and punishing them into oblivion.
  
  A lesson I learnt from a former boss: Someone screwed-up bigtime on a project, potentially costing us an important client. They realised their mistake and told the boss. The boss didn't explode, shout, or fire the employee, he just very calmy asked that everyone help to rescue as much as we could from the situation. When I spoke to him later about it, he said that it would have been counter productive to blame someone who new they had made a mistake and probably felt very bad about it. In my book, that's a good people manager.
3. Re:You've got to admire the Mizuho execs... by HardCase · 2005-12-09 05:02 · Score: 4, Interesting
  
  Something very similar happened to me in a previous job. I made a mistake that cost the company several thousand dollars and had the potential to alienate a good customer. I told my boss what I did and we decided what to do to fix it. His boss wanted me fired. My boss' response was to tell her that the way that he saw it, the company had just provided me with several thousand dollars worth of training and he wasn't about to throw that investment away.
  
  I guess it worked out - my boss retired a year or so later and I got his job. And it's a lesson that I've never forgotten (and, fortunately, only had to use once).
  
  -h-
Bust those trades by seniorcoder · 2005-12-09 04:19 · Score: 4, Informative

Most exchanges will call the members who have accidentally benefited from another member's mistake and ask them politely to agree to void the deal. Although not obligated to do so, most brokerages typically honor this request as they have to assume that they will be the next ones to make a mistake.
Re:This brings a WHOLE new meaning... by JonTurner · 2005-12-09 04:24 · Score: 5, Funny

>>I wonder which online deal site this was posted on first?

FuckedCompany.com
Re:Use http://www.xe.com/ucc by Minwee · 2005-12-09 04:31 · Score: 4, Funny

Congratulations, you may have what it takes to be an editor here.
New conversion! by Lord_Slepnir · 2005-12-09 04:33 · Score: 4, Funny

In addition to a Megabytes -> Library of congresses conversion, we now have a conversion of Frances to USD. I make 4.5833e-8 Frances last year!
Re:Give them my number by generic-man · 2005-12-09 04:34 · Score: 4, Informative

From Mainichi News: "The accidental order was 42 times bigger than the number of issued shares, but a computer warning of the misplaced order was overlooked." (emphasis mine)

--
For more information, click here.
Trading typos are hardly that rare... by The+Grassy+Knoll · 2005-12-09 04:34 · Score: 4, Interesting

A Lehmann Brothers trader keyed in a £300m sell instead of £3m in 2001 and cost the company £20,000 (in fines, cos he moved the FTSE downwards with such a large sell order).

And a Bear Stearns employee typed in $4bn instead of $4m in 2002, again moving the index (thsi time the Dow Jones) down.

Mostly though these positions are unwound by agreement between the parties. I don't understand why that didn't apply here.

.

--
They will never know the simple pleasure of a monkey knife fight
Re:The End Of Slashdot by The+employee+can+cho · 2005-12-09 04:59 · Score: 4, Insightful

Then why are you still here?
Re:The End Of Slashdot by fallen1 · 2005-12-09 05:04 · Score: 4, Insightful

You know, all of the people posting on Slashdot about how "Digg is the future" are completely full of shit (not just singling you out Bombadier Beetle). What you seem to fail to realize (or, more likely, do realize and ignore in the hopes of someone responding to your troll [congrats! I'm responding :)]) is that the two sites serve genereally opposite purposes even though they are, technically, both tech-related sites. Slashdot is about having an in-depth conversation with peers and a chance to hear others take on the matter at hand. Digg is about seeing what hits the front page with high diggs and deciding "Do I want to read this story or not?" with, basically, no discussion.

Now please go troll somewhere else - Slashdot has enough of them as it is. I hear that Digg is looking for more so go play in their yard.

PS - I have Digg as one of my home pages on Firefox so I do check/read both sites so please no flames about "You don't know what you're talking about since you obviously don't dig Digg!"

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Dream as if you'll live forever.
Live as if you'll die tomorrow.
~Anonymous~