when one typo cost a startup $476 million

On December 8, 2005, a trader at Mizuho Securities was supposed to sell one share of J-Com Co., a Japanese recruiting firm going public that day, at ¥610,000. Instead, they typed an order to sell 610,000 shares at ¥1 each. The problem? J-Com had only issued 14,500 shares total.

Mizuho spotted the error within minutes and tried to cancel the order. But the Tokyo Stock Exchange's trading system was having a bad day—it rejected the cancellation request due to a "system error." Meanwhile, traders across Tokyo were gleefully scooping up shares at ¥1, even though the shares didn't exist. The exchange couldn't stop the trades.

By day's end, other firms had bought 970,000 non-existent J-Com shares. Mizuho was on the hook to deliver them. The firm eventually had to buy back real shares at wildly inflated prices (J-Com's stock hit ¥772,000 before the mess ended) and settle in cash for the phantom shares they couldn't deliver. Total damage: ¥40.7 billion, roughly $340 million at the time. Some reports put the final cost as high as $476 million after legal settlements.

The Tokyo Stock Exchange later apologized and paid Mizuho ¥10.7 billion in damages. The trader who made the typo? Not identified publicly, but presumably spent several years working very, very carefully.