Matt Levine, Columnist

Merrill Lynch Sold Some Stocks Too Fast

It was too easy for traders to cause a mini-flash crash by hitting the wrong button.

September 27, 2016 at 11:00 AM UTC

Matt Levine is a Bloomberg Opinion columnist. A former investment banker at Goldman Sachs, he was a mergers and acquisitions lawyer at Wachtell, Lipton, Rosen & Katz; a clerk for the U.S. Court of Appeals for the 3rd Circuit; and an editor of Dealbreaker.

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There are a lot of dumb obvious ways to "fat finger" your way into losing a lot of money in the stock market. You can try to buy 2,000 shares and accidentally buy 2,000,000 instead. You can try to buy 2 million dollars of Alphabet stock and accidentally buy 2 million shares -- more than $1.5 billion worth -- instead. You can try to buy 2,000 shares, not realize that your order has been sent, and then send the order again. (And again and again.) Trading is complicated and computers are fussy and you were out late last night and all those zeros tend to blur together.

Yesterday the Securities and Exchange Commission fined Bank of America Merrill Lynch $12.5 million "for maintaining ineffective trading controls that failed to prevent erroneous orders from being sent to the markets and causing mini-flash crashes," and the SEC's order lists 15 examples of Merrill fat-fingering the stock market.1474915768811 But what's striking about the examples is that none of them are quite that sort of dumb fat finger.1474908034153 Instead, they're like this: