The Financial Services Agency on Thursday ordered Mizuho Securities Co. to improve its operations after the company placed large, erroneous sell orders due to a typing error earlier this month that led to huge losses and shocked the stock market.
The financial watchdog also ordered the major brokerage to submit business-improvement plans by Jan. 20, according to agency documents.
The trouble began on Dec. 8, when a Mizuho Securities trader tried to sell 610,000 shares of job recruiting company J-Com Co. at 1 yen apiece instead of selling 1 share of the company for 610,000 yen. J-Com was making its TSE debut when the blunder occurred.
The error caused Mizuho Securities to lose 40 billion yen. It also forced the president and other executives at the Tokyo Stock Exchange to resign over their failure to cancel the erroneous trade and for other computer system problems that struck earlier in the year.
Last week, the FSA ordered the TSE to improve its operations after the botched trade involving Mizuho Securities and report on the measures by Jan. 31 to ensure problem-free trade and determine the causes of the fiasco.
It is the first time the agency has issued a business improvement order to a brokerage for a stock-order mistake.
The problem was caused by sloppy controls, which should have prevented the erroneous order from Mizuho Securities, according to an FSA official.