The cost of that Mizuho Securities trading blunder appears to have increased by some 50%. The botched share trade now looks likely to set the Japanese firm back around $335m, although the Tokyo Stock Exchange may well have to bear some of the pain, as a systems failure meant that Mizuho was unable to cancel out the trade when it first spotted the error.
And the finger is being pointed at an unnamed and relatively inexperienced 24 year-old female Mizuho staffer, who is said to have entered the trade by mistake, and ignored an error message that would have flashed across her screen. Having said this, this foul-up can't be put down to just one person. Clearly, there should have been other checks and balances that prevented a loss of this nature being sustained. And the Tokyo Stock Exchange has hardly smothered itself in glory.
In the meantime, Japan's financial services minister has been having a pop at the securities firms who made a lot of dosh at Mizuho's expense. Kaoru Yosano said that 'although I understand their transactions were legal, it is not a beautiful story for securities firms to snap up stocks while being aware of the erroneous sell order'.
UBS, Lehman Brothers and some of the Japanese securities firms, including Nomura, who took advantage of Mizuho's misfortune, are now thought likely to repay the profits that they made from their trades. CSFB and Morgan Stanley are also expected follow suit. Strangely, it remains unclear whether the money will be returned to Mizuho or not. There is a school of thought that the dosh might end up in a fund that will finance research into how the c.ck up occurred (and was not able to be rectified by the exchange) in the first place.
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