Dec. 14 (Bloomberg) -- UBS AG, which made the largest gain from a trading error that cost Japan's Mizuho Securities Co. 40.5 billion yen ($342 million), said it will give up the profit.
``UBS is pursuing discussions with interested parties to bring about an appropriate and timely resolution of the issue,'' UBS said in a statement today. It didn't say if it would return the money to Tokyo-based Mizuho, a unit of Japan's No. 2 bank.
UBS, Europe's largest bank by market value, made about 11.8 billion yen after Mizuho Securities mistakenly tried to sell 610,000 shares in J-Com Co.'s Dec. 8 debut for as little as 1 yen apiece. Nikko Citigroup Ltd. and Credit Suisse First Boston were among other brokerages that gained.
``Brokerages don't come out looking good by bidding for shares they know don't exist,'' Japan's Minister for Financial Services Kaoru Yosano said yesterday. ``Brokerages should operate in an ethical manner.''
Mizuho Securities, a unit of Japan's second-largest bank, had to pay UBS, Nikko Citigroup and other brokers that agreed to buy the shares 40.5 billion yen to cancel the trade. Japan Securities Clearing Corp. ordered Mizuho to pay 912,000 yen for each share it offered to sell.
UBS, Dentsu
UBS earned the most from the error, according to Ministry of Finance filings. The bank bought 32,198 shares, spending 19.55 billion yen. Mizuho had to pay 29.4 billion yen to settle that trade. In addition, UBS Securities Japan Ltd. bought 6,000 shares for 3.56 billion yen. The cost to Mizuho for canceling that trade was 5.47 billion yen.
The one-day gain by UBS would be more than double what its Japan unit made on trading over the past three years combined, according to company filings. UBS' Japanese unit lost 16.2 billion yen four years ago after it made a similar trading blunder on the initial public offering of Dentsu Inc.
In 2001, UBS mistakenly sold 610,000 shares in Dentsu, Japan's biggest advertising company, for 16 yen apiece on the first day of trading. The bank had helped sell the shares at 420,000 yen in the IPO.
UBS had intended to sell 16 Dentsu shares.
Mizuho's trader had meant to sell 1 share in J-Com, which has just 14,500 shares outstanding.
J-Com's shares dropped to 572,000 yen from the 672,000 yen opening price after the erroneous sell order on their first day of trading, the maximum decline allowed. The stock then jumped to 772,000 yen, gaining the maximum permitted, as Mizuho tried to buy back shares it had mistakenly agreed to sell.
Nikko, IPO
J-Com shares jumped by the permitted 100,000 yen limit to 1.02 million yen today as trading resumed. The Tokyo exchange had set the starting price at the 912,000 yen Mizuho had to pay to cancel its trades. There were 215 shares traded, compared with 708,124 on the Dec. 8 debut.
Nikko Citigroup agreed to pay 1.72 billion yen for 3,000 shares in J-Com, the filings show, 200 more than the company sold in its IPO -- which Nikko Citigroup arranged. Mizuho paid 2.74 billion yen to get out of the trade.
``We were working with Nikko Citigroup for two years on this IPO,'' J-Com board member Takashi Tanima said in a telephone interview from Osaka today. ``We want the brokerage to explain its behavior. We'll decide then if it gets any business from us in the future.''
Credit Suisse bought 2,889 J-Com shares. The Swiss bank made about 750 million yen, according to the filing. Lehman Brothers had 3,150 shares and earned about 670 million yen on the transaction. CSFB spokesman Isamu Kajino declined to comment on the bank's plans for the trading gains.
Morgan Stanley held 4,522 shares. The second-biggest U.S. securities firm by market value didn't say whether it was trading on its own account or for clients.
``Any solution should include the introduction of new rules so that trades that are clearly significant errors be rendered invalid so we avoid any repetition of this incident,'' Morgan Stanley said in a statement. They didn't say if they're considering repaying the profit.
mms
發表於： 2006/01/15 03:04pm
哇~~~~~~~~ 想起古人生词造字 一字千金果然不假
Lemon
發表於： 2006/01/15 02:27am
下面引用由rainbow在 2006/01/14 01:21pm 發表的內容： 有 康師傅 ma! Ha Ha ! 我喜歡 韓國 辛辣麵
almost... UBS would return the profit.... what an ibank...
