Interesting article in the AFR (p55) this morning. Merrill Lynch equities was fined by the ASX after incorrect trades inadvertently wiped out more than a quarter of the share prices of Newcrest & Tabcorp and more than half the value of Orica. The fines were related to processing errors.
get this, summary of trades: 1) 107 trades for tabcorp at $0.001 pushed price down from $8.01 to $5.90 on 24/9/08 on 107 trades 2) good news for longs of telstra as algorithmic trading engine was outdated and forced telstra price from $4.32 to $5.40 on an 9.7M share order from an offshore client 3) order for 100K orica shares was incorrectly enterd into the bot at $5.60 - 107 trades forced the orica price from $15.59 to $5.60 - 3/12/08 4) 100,000 newcrest shares entered at $0.26 caused 119 trades to push price down from $22.49 to $18.55 on 20/10/08
how much money did you lose on these "transactions" - you will be relieved to know that the asx stung merrill for a whopping $170,000 fine for these "inadvertent" trades - and it took more than 12 months to reach this point!!!!
I suppose we should rest easy as they have probably upgraded their outdated algorithmic trading engine!!!!
