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A $190 Million Misclick for T. Rowe Price (fortune.com)

Posted by EditorDavid on from the whoops! dept.

An anonymous reader writes: This week a court ordered restitution for any investors who'd opposed the 2013 buyout of Dell Inc., approximately $3.87 per share, plus interest. The investment firm T. Rowe Price was a vocal opponent of the deal, and had over 30 million shares scattered throughout its mutual funds. But an automated system at T. Rowe Price used its default setting -- which indicated support for the buyout -- an error which is now estimated to have cost the firm close to $190 million.
Dell won't receive the money "because, in essence, they checked the wrong box," reports Fortune. And the Baltimore Sun adds that the firm now faces the prospect of class action lawsuit from angry investors.

13 of 35 comments (clear)

  1. No misclick was involved by Anonymous Coward · · Score: 2, Informative

    If it is a preselected option in an automated system used by default, it's not a misclick - rather a badly setup config.

  2. $190 million? by 110010001000 · · Score: 3, Funny

    They spend that on hookers and blow in a single weekend.

  3. Why would they? by Anonymous Coward · · Score: 5, Insightful

    Dell won't receive the money "because, in essence, they checked the wrong box," reports Fortune.

    Why Dell would be receiving money in any case here? It sounds more like T. Rowe Price won't be getting any money from Dell because of T. Rowe Price's error.

    1. Re:Why would they? by Anonymous Coward · · Score: 3, Funny

      EditorDavid used to work for T. Rowe Price, he's brought his attention to detail to /.

    2. Re:Why would they? by silentbozo · · Score: 4, Informative

      AC is correct, the summary should have said that T. Rowe Price is going to miss out because they did not oppose the buyout when it came time to vote.

  4. Why is this Dell's problem? by ilsaloving · · Score: 2

    It's not Dells probably that TRP screwed up. If you're going to set up an automated trading system, you're still responsible if that system screws up. Period.

    It's beyond frustrating that companies like these get a free pass when they make errors that cost millions or billions of dollars. Then again, this is the US, so who am I trying to kid?

    1. Re:Why is this Dell's problem? by Anonymous Coward · · Score: 3, Informative

      RTFA, the summary is wrong and makes no sense. Dell lost the lawsuit to shareholders who voted against the deal for undervaluing shares. TRP is not eligible for the winnings from that lawsuit because their computer made the mistake of voting for it. TRP may be liable to its investors because they are losing out on $190 million due to the computer glitch because without it the company was supposed to vote against the deal and be eligible for the lawsuit money.

  5. That's a terrible summary by mhkohne · · Score: 4, Informative

    Proper summary:
    The SLP buyout of Dell has been found to be underpriced, and SLP will have to make restitution to those who opposed it.
    TRP doesn't get any of that money because they screwed up and didn't register as opposed to the buyout.

    I've no idea if it's reasonable that SLP has to pay out to those who opposed the buyout.
    It's perfectly reasonable that TRP gets nada, since they screwed up their end of things.

    --
    A thousand pounds of wood moving at 300 feet per minute. Don't get in the way.
  6. missing the point? by convolvatron · · Score: 2

    doesn't anyone find it funny that a firm that moves a lot of money and employs a lot of people finds in necessary to make a bot that always says "yes, approve this buyout"

    1. Re:missing the point? by ATMAvatar · · Score: 2

      Why would we? The computer makes the decisions faster than humans would, and apparently there are no consequences when it doesn't do what the firm wants (or just as likely, when the firm changes its mind afterwards).

      --
      "They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety."
  7. Nobody crying.... by Lumpy · · Score: 2

    Honestly TRP deserves the loss as their kind are pretty scummy. and if someone did not check the settings and they rely on pure automation like that... They absolutely deserve losses of that magnitude and higher.

    --
    Do not look at laser with remaining good eye.
  8. Re:they probably saved money by mspohr · · Score: 5, Insightful

    They get paid either way. If the computer does it, they get paid. If they do it, they get paid. If they screw up, they get paid.
    Heads they win, tails you lose.
    T. Rowe Price average expenses 1%
    Vanguard average fees 0.18%
    If you're paying them 1% a year with a gross return that is only 4% then you are paying them 25% of your profit.
    Best to check on those fees before you invest.

    --
    I don't read your sig. Why are you reading mine?
  9. Re:Capitalism. by John+Meacham · · Score: 2

    This has nothing to do with trading or algorithms.

    This was a mistake made by their system that handled shareholder votes about corporate buyouts interacting with a lawsuit.

    --
    http://notanumber.net/