It’s not just Sumo Wrestlers with Fat Fingers

The BBC recently reported that Sumo Wrestlers were to be given iPads as it makes them easier to use: “Fat-fingered
sumo wrestlers, unable to tap the keys on a standard mobile phone, are
being given iPads to help improve communication.”

Maybe they should do the same with traders as, at the end of August, the LSE had a fat finger moment, when five stocks suddenly experienced wild swings.  Some attributed this to the fact that the stocks began with the letters U, H, B and N, which happen to be adjacent to each other on the keyboard, although the LSE later denied this was the case.

This erratic behaviour follows the ‘flash crash’ of May 2010, where the Dow Jones Industrial Average lost 6% of its value in a few minutes and some believe it was due to a trader’s fat finger hitting the billion button instead of a million, although there is no evidence to support this.

Inspired by such moments, here are a few other fat finger moments:

Japanese trader makes £22 billion mistake (February 2009)

A trader working in the Japanese branch of the Swiss bank UBS mistakenly ordered £22 billion of bonds while trying to buy just £220,000.

Morgan Stanley fined for $11 billion mistake (February 2007)

The New York Stock Exchange said on Wednesday it has fined Morgan Stanley (MS.N) $300,000 for its failure to stop a trader from entering an order to buy $10.8 billion in stocks, instead of the $10.8 million that was intended, an error that disrupted trading in nearly 700 listed stocks in 2004.

Heads up at Bank of America (September 2006)

A Bank of America trader’s keyboard was set up to execute an order when the senior trader gave the signal — he just had to press enter. Roughhousing traders tossed a rugby ball in his direction, which landed on his keyboard and executed the $50m trade ahead of schedule.

Oops! Citigroup did it again (January 2006)

Citigroup was investigated by the UK Financial Services Authority for the second time in 18 months after a trader at Nikko Citigroup intended to buy two shares in Nippon Paper at ¥502,000. Instead he input an order for 2,000 shares.

Trainee costs Mizuho $224m (December 2005)

Japan’s Mizuho Securities let a 20-year-old trainee to input large trades even though he’d only been there for two weeks. Instead of buying one share of J:Com at ¥610,000, he ordered 610,000 shares at ¥1 each. This was 41 times J:Com’s outstanding stock. The Japanese market dropped 2% and Mizuho lost $224m.

Record Sales (February 2005)

A broker tried to sell 15,000 shares in music publisher EMI at 280¼p but instead placed an order for 15 million in a transaction worth £41.5 million.

Currencies Exchanged (November 2002)

A market maker confused the price of Ryanair shares in euros and sterling, sending the London quote up more than 61 per cent, from 404.5p to 653.7p.

DAX the way, I don’t like it (September 2002)

A Eurex trader intended to sell one futures contract when the DAX, Germany's index of leading shares, reached 5,180. Instead, he sold 5,180 contracts, sending the market into a free fall. Five hours later, the exchange announced the cancellation of a raft of other trades.

Bear sends markets plunging (October 2002)

A trader at US bank Bear Stearns was blamed for a 100-point fall in the Dow Jones Industrial Average after he entered a $4bn sell order instead of a $4m order. More than $600m of stock changed hands before the mistake was detected. The day’s 183-point slump was blamed on the trader’s error.

UBS Warburg is made to look sheepish (December 2001)

A UBS Warburg trader selling 16 shares in Japanese advertising giant Dentsu at ¥600,000 (€3,900) instead sold 610,000 at ¥6 — hours before UBS was to lead Dentsu’s IPO. The order was cancelled but not before 64,915 shares, almost half of the 135,000 shares in the Tokyo listing, had been sold. UBS Warburg lost up to $100m when it was forced to buy the shares it sold.

Lehman Brothers fingered (May 2001)

A London based Lehman Brothers trader wiped £30bn (€44bn) off the FTSE 100 in 2001 when he ordered sales of shares in blue-chip companies, such as BP and AstraZeneca, that were 100 times larger than intended. He keyed in £300m instead of £3m for a trade, causing a 120-point drop in the index and a £20,000 fine for Lehman Brothers.

London’s biggest order (February 2001)

The LSE had to cancel its biggest trade in history after a clumsy trader placed an order for £8.1bn (€11.8bn) worth of shares in Autonomy — nearly four times the market cap of the company. The order was described by an LSE source as ‘clearly an inputting error’ and was cancelled almost as soon as it hit the order book.

£80bn Swiss order leaves UBS red-faced (January 1999)

A careless UBS equity specialist executed the world’s single biggest share trade when he bought and sold nearly Sfr190bn of stock in Swiss pharmaceuticals company Roche in two minutes. It was significantly higher than Roche’s market cap and the 10 million share sell order was more than the seven million shares in the float.

A bad workman blames his keyboard (October 1998)

Salomon Brothers sold 10,000 futures contracts on French derivatives exchange Matif. An independent audit revealed the error had been caused by a trader leaning his elbow on his keyboard’s F12 button, the instant sell key.

A schoolboy error (September 1997)

A trader entered Zeneca’s Sedol (CUSIP) number, the six-figure code used by the exchange to identify stocks, instead of the volume, a £21m buy orders for Zeneca shares at three times its price. Total cost: £60m.

Much of this list owes its origins to Financial News.