Japan broker costs his firm $4.4m

The Tokyo Stock Exchange has been plagued by mis-selling

A Japanese stock brokerage has lost $4.4m (£2.5m) after one of its dealers sold 25,000 shares in the wrong firm.

The mistake - the third such blunder to hit the Tokyo Stock Exchange in just over a month - took place on Friday at the Daiwa Securities brokerage.

Under the error, a Daiwa dealer sold shares in Japan's third largest bank instead of a smaller subsidiary.

Back in December another brokerage, Mizuho Securities, lost $333m when a trader apparently hit the wrong button.

Exchange boss resignation

The Mizuho trader ended up selling 610,000 shares for 1 yen, instead of one share for 610,000 yen.

Takuo Tsurushima was forced to resign in December

That scandal saw the eventual resignation of the former president of the Tokyo Stock Exchange, Takuo Tsurushima, after the bourse admitted that a fault in its computer system meant the mistyped trade could not be cancelled in time.

A second trading error took place earlier this month at fellow Tokyo broker Nikko Citigroup.

Under the latest blunder, the Daiwa broker sold 20,000 shares in Japan's third largest bank Sumitomo Mitsui rather than another Sumitomo Mitsui-related company.

Straining system

With the shares put up for sale at 3.4% below their value, half were snapped up before the error was realised.

Daiwa bought back all the lost shares by the end of trading, but only after having to pay $4.4m.

The recent errors on the Tokyo Stock Exchange have raised concern that its computerised trading system is unable to properly cope with the increased volumes of business that have accompanied the market's recent surge to five-year highs.

Trading had to be suspended on the exchange for more than four hours back in November after a computer glitch.