A Japanese brokerage firm is suing the Tokyo Stock Exchange for almost $400 million Friday, saying the exchange's computers failed to allow it to cancel a sell order that went horribly wrong.
Last December, a trader from Mizuho Securities was trying to sell one share of newly listed employment company J-Com Co. for 610,000 yen — about $5,800. Instead, the trader accidentally entered an order to sell 610,000 shares at one yen each.
Tokyo Stock Exchange president resigned after erroneous sell order could not be cancelled.
The trader immediately realized the mistake and tried to cancel the order. But the computer system at the Tokyo Stock Exchange would not allow the order to be cancelled.
The sell order went through and Mizuho Securities found itself saddled with a loss of 40.7 billion yen ($387 million).
The brokerage firm and the Tokyo Stock Exchange held talks over how much responsibility each side should bear for the trading blunder. But the two sides could not agree.
"Negotiations were not moving forward and we concluded that a private settlement was out of reach, so we had no choice but to file suit," Mizuho Securities said in a statement.
It's the first time that the Tokyo exchange has been sued by one of its member firms.
The Tokyo Stock Exchange (TSE) had earlier admitted it bore some of the blame for the loss. Its president quit shortly after.
"The TSE will confirm the content of the complaint, and make clear our assertions on the matter in the appropriate legal forum," a message on its website said Friday.
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