BNP Trading System Bug Wiped $3 Billion Off Taiwan Energy Stock

(Bloomberg) -- A bug in a trading system run by BNP Paribas Securities caused erroneous orders that knocked almost 10 percent off the value of Taiwan’s third-biggest stock at the close of trading Wednesday, the island’s stock exchange said.

Formosa Petrochemical Corp. lurched from around 116 Taiwan dollars to 106 in a cascade of orders that culminated in a 15.2 million-share closing auction. About $3 billion was erased from Formosa’s market value. The mistaken trades totaled some NT$680 million ($23.3 million), the exchange said in a text-messaged response to a Bloomberg News query.

BNP is shown in data compiled by Bloomberg as having handled 26 times as much sell-volume in the stock as any other broker. BNP was investigating the trading error with all involved parties, in liaison with the Taiwan Stock Exchange and regulators, it said in an emailed statement.

Exchange officials told Bloomberg News earlier they’d found errors were made when orders were placed, and that brokerages will need to apply to the exchange to fix them. Data sent to Bloomberg shows BNP having handled sell volume totaling 14,967,000 Formosa Petrochemical shares at a weighted average price of 106 Taiwan dollars. No other firm is listed with more than 565,000 shares.

The island’s equity benchmark, which was up as much as 0.6 percent earlier in the day, erased all its gains at the close. Formosa Petrochemical makes up 3.1 percent of the Taiex.

To contact the reporters on this story: Cindy Wang in Taipei at hwang61@bloomberg.net, Sofia Horta e Costa in Hong Kong at shortaecosta@bloomberg.net, Benjamin Robertson in Hong Kong at brobertson29@bloomberg.net.

To contact the editors responsible for this story: Richard Frost at rfrost4@bloomberg.net, Sam Mamudi at smamudi@bloomberg.net, Chris Nagi

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