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Journalism of Courage
A slip of the finger led Bear Stearns Cos Inc on Wednesday to erroneously enter an order to sell $4 billion worth of stocks, fuelling an already tumbling market.
The order about 20 minutes before the closing bell was the result of a ‘clerical error’ and should have been entered as $4 million, the New York Stock Exchange said in a statement.
All but $622 million of the orders were cancelled before execution, it said. Bear Stearns said the error will have no material impact on the company and declined to comment further.
“When a large brokerage house like Bear Stearns sells a large quantity of anything, people assume Bear Stearns knows something and it will move the price,” said Daniel Weaver, Associate Professor of Finance at the Zicklin School of Business at New York’s Baruch College. “It was a bear sign from Bear Stearns.”
“It’s not very common,” said Richard Repetto, an analyst with Putnam Lovell NBF.
