Nikko hit by latest Japanese trading error

A new trading error on the Tokyo Stock Exchange looks set to cost broker Nikko Citigroup an estimated JPY1 billion ($8.6 million). The development follows a more serious trading error at Mizuho on December 8.

This time the security involved was Nippon Paper, which was trading yesterday at JPY502,000 per share. An unnamed trader at brokerage Nikko Citigroup, a Japanese joint venture between Nikko Cordial and Citigroup, mistakenly believed the price to be JPY502, and placed a buy order for 2,000 shares instead of two.

After the order had been filled, the trader attempted to re-sell the shares, but was unable to find buyers for all of them.

Nikko Citigroup said the trader had placed the order on his own behalf rather than for the firm, and that the shares would be sold when market conditions were favourable. Nikko's compliance department failed to notice the error before the order was placed, Nikko said.