Tokyo error triggers huge lawsuit

A trader with Mizuho Securities mistyped an order and sold 610,000 shares for one yen instead of one share for 610,000 yen last December.

A fault in the TSE's computer system meant the trade could not be cancelled and Mizuho lost $225m.

The head of the TSE, Takuo Tsurshima, resigned over the debacle.

Now Mizuho says it has filed a huge lawsuit against the Tokyo Exchange.

Talks over compensation had led nowhere, Mizuho said, and the claim for damages reflected its losses arising from the inability of the exchange to process an instruction to cancel the sale and other costs incurred in the aftermath of the incident.

The TSE initially acknowledged that it bore some responsibility for Mizuho's inability to recall the sales order.

Catalogue of errors

The TSE has been plagued by errors in its trading systems.

In November 2005 the TSE suspended trading for four hours following a computer glitch.

In January this year a Daiwa dealer mistakenly sold shares in Sumitomo Mitsui Bank rather than a smaller Sumitomo subsidiary.

In response to these problems the TSE doubled its IT budget and in January unveiled a three-year programme to upgrade trading systems.

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