Japan's Mizuho Securities has demanded $350 million in compensation from the Tokyo Stock Exchange in connection with a massive trading error last December, the head of the exchange said on August 22.
Speaking at a news conference, TSE Chairman and President Taizo Nishimuro said the exchange did not intend to pay Mizuho over the mishap, in which a trader at the brokerage mistakenly offered to sell 610,000 shares of a newly listed recruitment firm for 1 yen apiece. The trader had meant to offer one share for 610,000 yen. The bourse's computer system ignored Mizuho's attempt to cancel the mis-keyed order, and Mizuho was forced to buy back the shares from market investors at a huge loss.
"We plan to consult with lawyers and explain our side of the story," Nishimuro said, without elaborating. The two sides have been in talks over compensation since the error occurred, and Mizuho's decision to press its claim in writing suggests it has grown frustrated with the informal discussions.
Mizuho, a unit of Mizuho Financial Group, Japan's second-biggest bank, booked a 40.7 billion yen ($350 million) one-time charge in the third quarter last year to clean up the mess, slightly more than the 40.4 billion yen it is demanding from the exchange.
The TSE initially acknowledged that it shared responsibility in the affair, which raised concerns about Japan's ageing stock-trading infrastructure.