It might be the silliest excuse ever concocted by the financial services industry. When someone erroneously authorizes a ridiculously gargantuan trade on a trading platform, the firm blames it on a “fat finger.”
So what on earth is a fat finger? Both literally and figuratively speaking, it’s a sluggish human digit at the end of a hand. Can you visualize someone, with such an extremity, who types too many zeroes into a keyboard?
Earlier this month, a Samsung Securities broker with a fat finger typed an accidental issuance of $100 billion of company shares to employees. By the time the error was detected and reversed, sixteen employees had sold the shares and collected significant proceeds.
Were those employees acting unlawfully? The legal system has not yet determined an answer to that question. But the incident has raised uncomfortable questions about the security of the global financial system.
After all, if a single keypunch error can result in the issuance of $100 billion of shares, how vulnerable is the system to the work of hackers? Or to even larger erroneous — or even intentional — cash disbursement transactions?
Indeed, if we believe that Samsung’s error is merely an isolated mistake, we may be basking in a false sense of security. Perhaps, instead, we should ask how often Samsung’s system of internal control fails to prevent such simple errors.