Fat fingered trades - Great bloopers of our time


Here's a quick look at some of the trading disasters which have occurred in recent years. Note that these are genuine foul-ups (or 'fat-fingered' trades), and not losses down to rogue traders.

First off, it was December 2005 when Mizuho Securities revealed that it was facing a $335m loss after an unnamed and relatively inexperienced employee mistakenly entered a trade, and ignored an error message that flashed across her screen. The problem was compounded as a systems error over at the Toyko Stock Exchange meant that the firm wasn't able to cancel the erroneous order after it was first discovered.

In May 2001 someone over at Lehman Brothers pressed the wrong button (or the right button too many times!) and sold $429m in shares in certain large corporates - 100 times more than should have been sold. The error occurred just before the London market closed and is said to have temporarily wiped off $52bn from the FTSE. Lehman was subsequently fined $34,000 over the affair.

In December 2001 a trader over at UBS is said to have faced a loss of around $123m, when he attempted to sell 16 shares in Japanese advertising firm Dentsu at 600,000 yen each. Instead he actually sold 610,000 shares at 6 yen each! Fortunately for UBS (and the trader), the firm was able to unwind most of the transactions.

Then there was the Bear Stearns foul up. That's when, in October 2002, a 'clerical error' just before the Closing Bell saw the firm sell $4bn in a certain company's stock instead of $4m! Fortunately, all but $622m of the sell orders were canceled before execution.

And what about that episode, one day in June 2002, when shares in Knight Trading fell more than 50%. A software glitch triggered an accidental wave of selling in the shares!

Finally, a true classic. It was in November 1999 when an unknown dealer rested his elbow in his keyboard, and accidentally placed an order for $3.2m in Premier Oil shares!


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