Mizuho seeks $350 million from TSE

Mizuho Securities is demanding ¥40.4 billion ($347 million) from the Tokyo Stock Exchange (TSE) to compensate it for a trading error that it was unable to cancel on time.

A deadline of 15 September had been set for the exchange to respond. However, Taizo Nishimuro, president of the TSE, says the exchange has no intention of paying the charge.Mizuho and the TSE have been negotiating since December, when a sell order was completed for 610,000 shares in a local recruitment firm at ¥1each. Mizuho’s intention was to sell a single share at ¥610,000, but a technical flaw with the TSE rendered it unable to cancel the order.The compensation demanded by the firm represents the amount it had to pay to buy back the shares at a premium. The exchange’s chief executive, chief information officer and computer systems head all resigned in the wake of the trading error, while six other executives took temporary pay cuts. Both Mizuho and the TSE have been busy improving their information systems since the error. A three-year technology revamp is now in place at the TSE, and more than $500 million has been earmarked for improvements.