Help me find a news story about a trader who made a costly mistake

September 6, 2019 3:22 PM

I remember reading a story, probably in the 1990s about a trader who bought something like 7 million shares of a company instead of $7 million dollars worth of shares. I think this appeared in the Wall Street Journal. As I remember it, he wasn't fired, on the grounds that his employer had just spent millions of dollars educating him. (I know there's a similar story about Thomas Watson at IBM.)
posted by espertus to Work & Money (9 answers total)

There seems to be one of these every few years. Here's a good list.

You might be thinking of the last item on that list, where a Lehman Brothers trader caused the FTSE to drop over 100 points when he ordered 100 times as much stock as he intended to as part of a complicated transaction involving almost all the stocks in the index.
posted by firechicago at 3:31 PM on September 6, 2019 [1 favorite]

I like this story about a trader who inadvertently took physical delivery of 28,000 tons of coal, while attempting to trade futures.
posted by whisk(e)y neat at 3:34 PM on September 6, 2019 [8 favorites]

A Tiny $25 Million Mistake maybe?
posted by vespabelle at 3:44 PM on September 6, 2019 [1 favorite]

I don’t know of the particular incident you’re referring to, but the Wall Street description of this is a “fat finger trade”. There are many of them.
posted by thenormshow at 7:47 PM on September 6, 2019

This one happened in Japan and cost the firm $225 million
posted by AgentRocket at 8:16 PM on September 6, 2019

I have to tell you, this screams "untrue folk narrative" in its structure. A firm might fire a trader for making such a mistake, or it might shrug and say, "Eh, fat-fingers happen," but...spent millions educating? That is not how a modern firm thinks.
posted by praemunire at 8:32 PM on September 6, 2019 [3 favorites]

I have to tell you, this screams "untrue folk narrative" in its structure

This is an incredibly well known true story, and in fact it’s the last link in the question.
posted by sideshow at 9:52 AM on September 7, 2019 [1 favorite]

When I (briefly, ill-advisedly) worked at a forex trading firm, I was pretty shocked to find that the traders' order system had no checks at all for input values. They didn't want to have any delay between what they typed and what went in as an order. We had to correct for fat finger and wrong-big-figure (where you meant to type 146, say, and typed 416 instead) trades quite often.
posted by scruss at 11:06 AM on September 7, 2019 [1 favorite]

Not a trader, but Knight Capital self-immolated - they lost almost half a billion dollars in 30 minutes, about three times that organization's annual earnings and subsequently went out of business - when they deployed a their high-volume stress-testing harness to live production servers.
posted by mhoye at 5:11 PM on September 8, 2019 [1 favorite]