(Bloomberg) -- Mizuho Financial Group Inc.’s online stock platform crashed Tuesday, making it harder for individual investors to trade on a day when a company whose initial public offering it underwrote listed on the Tokyo Stock Exchange.
The fault was due to a network failure and the bank will report more details when available, Mizuho said in a statement, without specifying when the system will recover. Mizuho reported the issue to the Financial Services Agency, Atsushi Maruyama, a spokesman for the securities unit, said by phone.
Mizuho said the outage was unrelated to a major systems upgrade that the financial group is implementing. Japan’s third-biggest bank by market value has suffered a series of information-technology mishaps that have drawn regulatory scrutiny in the past, including a costly “fat-finger” trading mistake at the securities arm in 2005.
The glitch made it difficult for shareholders of Kokusai Pulp & Paper Co. to trade the stock on its debut, Maruyama said. Shares of the Tokyo-based paper wholesaler jumped as much as 37 percent before closing 7.6 percent higher. Mizuho was the lead manager of the offering.
Mizuho’s clients “might have missed an opportunity to sell the shares at a high price,” said Kazumi Tanaka, an IPO analyst at DZH Financial Research Inc. in Tokyo.
‘Surprised to See’
“We were surprised to see this happen on our first day of trading,” Haruyoshi Asada, a Kokusai Pulp executive who oversaw the listing, said by phone. He said it was too early to determine any impact on trading of the stock.
Mizuho’s Net Club website for Internet trading serves 1.2 million account holders and has 130,000 users a month. While it’s offline, individual investors can still trade by phone and at branches, Maruyama said.
An FSA official confirmed that Mizuho contacted the regulator, while declining to comment further.
In December 2005, a typing error caused Mizuho Securities to mistakenly offer to sell 610,000 shares of J-Com Co. for 1 yen each, instead of one share for 610,000 yen. The mistake cost the bank billions of yen and prompted the FSA to order it to improve its operations.
Mizuho implemented the first phase of its information technology upgrade earlier this month, saying it progressed as planned. The project, which has incurred years of delays and cost overruns, is intended to unify the core systems of the corporate, retail and trust banking arms.
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