How a stray mouse click choked the NYSE & cost a bank $150K

[Mr Kleen]

How a stray mouse click choked the NYSE & cost a bank $150K

Double-click of death: the Credit Suisse fiasco

Like Goldman, Sachs and other large banks, Credit Suisse has a proprietary trading desk—i.e., a division of the bank that trades stocks and derivatives in order to make money for the bank itself (instead of for the bank's customers). And, like other banks in its class, much of this proprietary trading is now done entirely by computers that execute trades by the millisecond based on tiny, fleeting fluctuations in a stock's price.

On November 14, 2007 at 3:20pm one of Credit Suisse's trading algorithms suddenly went haywire, and, in a few moments, sent hundreds of thousands of bogus requests to the exchange. This sudden surge of requests, which were cancellations for a large batch of orders that the machine had never actually sent out, acted like a denial-of-service attack on some parts of the New York Stock Exchange. The messages clogged the tubes and caused parts of the exchange to freeze up, affecting trading in 975 stocks.

After an extensive investigation, the NYSE assessed a $150,000 fine for Credit Suisse's "failing to adequately supervise the development, deployment and operation of a proprietary algorithm, including a failure to implement procedures to monitor certain modifications made to the algorithm."

The exchange's filing, released a little over a week ago, has the details of precisely what drove the algorithm haywire—it was a trader who accidentally double-clicked an icon in a trading program's interface, when he should've single-clicked. No, I am not making that up.

[ElZorro]

Brilliant!

[complacent]

yay!

best of luck in your new career, sucka.

[HappyIdiot]

Seriously? All I can say is wow....

[Mr Kleen]

Completely recoded the interface and do NO TESTING?!?

[zaxrex]

Dude, that wasn't in the contract.

[captainslow]

i used to work on wall st. and remember when that happened. everyone had a big laugh about it. i didn't know at the time that it was just an extra click that caused this, which is pretty ridiculous. definitely sloppy on CSFB's part for designing a trading system where something that minor could have such repercussions on the market. it was a prop desk too - at the least, it could have had a huge impact on their own trading positions too. firms are supposed to have fat finger checks in their systems to prevent inadvertent additions of extra zeroes, for example. but i've never heard of any errors caused by something so accidental as a single mistaken mouse click.

as far as other ridiculous occurrences with a wide market impact, twice Nasdaq has been shut down b/c of errant squirrels

[Sabre]

As someone who has worked for a rather large financial institution, I can tell you that place are, in general, paranoid about this kind of thing. I know of one application that made 10's millions in a couple of days at the end of every month. The QA that ANY revision of that software went through was the most extensive I've ever seen/heard of just to avoid this type of mistake.

[michel]

It was really quiet interesting thing to know

[Sabre]

It was really quiet interesting thing to know

I do believe we have a spammer!

michelwilso55@hotmail.com
inetnum: 122.177.0.0 - 122.177.255.255
netname: BNLD-209392-NewDelhi
descr: BHARTI TELENET LTD. NEW DELHI
descr: 224
descr: Okhla Industrial Estate
descr: New Delhi
descr: Delhi
descr: India
descr: Contact Person:Raghvendra Singh
descr: Email: nocnorth@airtel.in
descr: Phone: 011-41612222
country: IN
admin-c: NA40-AP
tech-c: NA40-AP
mnt-by: MAINT-IN-TELEMEDIA
status: ASSIGNED NON-PORTABLE
changed: techsupport@airtel.in 20090727
source: APNIC

goodBye Mr. Wilso!

[zaxrex]

Hey Michel
I want my $20 I lent you.