The Associated Press reported today that an unidentified (and now unemployed) trader at Mizuho Securities made a small typing error on Thursday when making a stock sale related to a new offering. Apparently, he meant to offer to sell 1 share for 610,000 yen, but instead offered 610,000 shares for 1 yen each (less than a penny).
Not surprisingly, others were happy to snap up the shares. But that meant Mizuho had to buy enough shares on the open market — at the actual price — to cover the offer (at least if I understand this correctly). That meant that, by the end of the day, it had lost about 27 billion yen, or 225 million dollars. That, plus questions it raised about whether the Japanese trading system was really reliable (for one thing, the mistaken order was 41 times the number of outstanding shares for that company, but the order was still processed), caused the Nikkei index to drop 2 percent that day.
The Japanese government said it was considering new rules and regulations that would make such mistakes less likely.