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Last Updated: Tuesday, 28 June, 2005, 14:27 GMT 15:27 UK
Mistake costs Taiwan broker $223m
Taiwan Stock Exchange
Fubon's shares have actually now risen
A Taiwanese stock brokerage that mistakenly bought $255m (140m) of assorted shares, has had to spend $223m to sort out the mess.

The shares, in a number of small and medium sized listed firms, were wrongly purchased for a client by a Fubon Securities trader on Monday.

Fubon was able to sell back only $31.8m of the stocks, forcing it on Tuesday to purchase the remaining $223m worth.

Putting on a brave face, it said it was pleased to be taking on the shares.

The stock was wrongly purchased by a Fubon trader because he or she was unfamiliar with the company's new computer trading programme.

'Bright prospects'

Fubon originally put the shares it could not sell in a special account, but announced on Tuesday that it would take full ownership of the stocks.

It said it was pleased to take on the shares "given the bright prospects of the Taipei stock market in the second half [of 2005]".

In addition to the cost of $223m for the shares, Fubon has also taken on an estimated $13m paper loss, as a result of the shares in question going down in value.

Despite the giant financial hit, shares of Fubon Securities' parent firm Fubon Financial Holding rose by 0.47% on Tuesday, as analysts applauded the prompt way in which it handled the matter.

"Fubon did not handle this in a blunt fashion by selling directly to the market, so concerns have largely disappeared," said analyst Alex Huang, vice president in charge of research at Barits Securities.

The dealer concerned has been ordered to stop trading, and an investigation is underway.


SEE ALSO:
German shares tumble on error
20 Nov 01 |  Business
Human error and financial markets
16 May 01 |  Business


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