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EDITIONS
Thursday, 3 October, 2002, 00:27 GMT 01:27 UK
US bank in $4bn clerical error
Dollars
The US investment bank Bear Stearns entered an order to sell $4bn (2.6bn) worth of stocks by accident in late trade on Wednesday, the New York Stock Exchange (NYSE) has said.

The exchange said the order was the result of a "clerical error" and should have been for $4m.

All but $622m of the order was cancelled before execution the NYSE said.

Bear Stearns told the Reuters news agency that the mistake would have no material impact on the company.

On Wall Street, the Dow Jones index closed down 183.18 points at 7,755.61, a fall of 2.3%.

Late trading

NYSE officials said that the erroneous order was made at 1540 (1940GMT) on Wednesday, 20 minutes before the market closed .

Bear Stearns entered an order to sell $4 billion worth of Standard & Poor's securities.

NYSE officials said that sophisticated arrangements - called hedges - surrounded the risk from the orders that were carried out.

Nonetheless, the order was still 1,000 times more than was intended.

A BBC correspondent in New York says mistakes are rare, meaning that if the firm has escaped an impact at the bottom line, such an error may well be described as clerical but it will also be seen as embarrassing.

Previous errors

Mistakes have been made in market trading before by other companies.

In May last year, London's FTSE 100 index dropped by more than 2%, after a trader typed 300m, instead of 30m, while selling a parcel of shares.

In 1998 a Salomon Brothers trader mistakenly sold 850m-worth of French government bonds by leaning on his keyboard.

And at the end of 2001, shares in Exodus, a bankrupt internet firm, jumped by 59,000% when a trader accidentally bid $100 for its shares, at a time when its value was 17 cents.

 WATCH/LISTEN
 ON THIS STORY
The BBC's Patrick O'Connell in New York
"Such an error will be seen as embarrassing"
Stockbroker Brian Tora
"There have been some fairly high profile mistakes like this"
See also:

02 Oct 02 | Business
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03 Sep 02 | Business
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