Duplicate order placement brought disaster! Taishin Securities' misposted account total reached 1.76 billion yuan, surpassing 9,000 trades and setting a record for Taiwan stocks

After the merger between Taishin Securities and Yuanfu Securities, system abnormalities kept intensifying. Today it was revealed that the misposted account reporting amount over the past three days has exceeded 1.7 billion yuan, far above the market’s original estimate of 100 million yuan. With more than 9,000 trades, the number of transactions has also hit a historic high. The company again apologized on the 16th and issued a four-point statement, pledging to fully bear the amount of the losses.

Taishin Securities’ revealed misposted account amount: ballooned to 1.76 billion yuan in three days

Taishin Securities experienced a major trading system abnormality on April 14. As the reporting process was completed one after another, the scale of the misposted accounts far exceeded market expectations.

According to a report by Economic Daily, Taishin Securities reported misposted accounts day by day starting from the day the incident occurred: on the 14th, the first day reported about 20 million yuan; on the 15th, about 370 million yuan. On the 16th, before the final reporting deadline, it added another 1.37 billion yuan. Over three days, the total reported amount reached more than 1.76 billion yuan—more than 17 times the 100 million yuan figure that was being circulated in the market at the start of the incident.

In terms of the number of trades, the overall misposted account reporting is roughly estimated at about 9,000 trades. Because many of the affected parties are ordinary individual retail investors, the number of trades has already set a new record for Taiwan stocks, while the amount has not broken past records.

The cause of the system abnormality was “unstable merger integration,” and duplicate order placement created an embarrassment

The root of this misposted-account controversy lies in the system integration issues between Taishin Securities and Yuanfu Securities. Two brokerage firms under Taishin Shin Kong Financial Holdings formally merged on April 6, becoming the fourth-largest brokerage firm in Taiwan. However, after the merger, the electronic trading system continued to experience problems. On April 7, the first trading day after the merger immediately saw issues such as the App being unable to place orders and inventory display errors. At that time, the Securities and Futures Bureau under the Financial Supervisory Commission had already asked Taishin Securities to report “major incidental events” and dispatched staff to conduct checks.

On April 14, Taiwan stocks surged by more than 700 points during intraday trading, yet Taishin Securities’ electronic trading platform also went down again. After investors placed orders, the system displayed “communication failure.” Many mistakenly thought it was a network problem and placed duplicate orders. About an hour later, all orders simultaneously showed as filled, resulting in an unexpected large number of duplicate trades. The order-canceling function also shut down in sync.

The Securities and Futures Bureau preliminarily judged that this major outage was caused by the brokerage firm’s replacement of its back-office accounting system, along with the massive traffic influx at market open.

(After Taishin Securities merged with Yuanfu, the system went down again: order abnormality caused duplicate trades, with misposted accounts rumored to exceed 100 million yuan)

Part of the misposted accounts that are not reported in time may be difficult to reverse and offset; Taishin Securities may profit from the bull market

As the reporting deadline ended, rumors circulated that the internal situation of Taishin Securities’ funds and securities still had not been fully clarified. Under regulations, misposted accounts that were not completed for reporting by 10:00 a.m. on the 16th will not be able to perform reverse offsetting as required; they can only be settled through negotiations between the company and investors for compensation.

On the other hand, Taiwan stocks have been rewriting historical highs for four consecutive days recently. On the 16th, the weighted index even first broke above the 37,000-point threshold. In response, people in the securities industry analyzed that when Taishin Securities executes reverse offsetting of misposted accounts, it may instead “profit” due to the bull market.

Taishin Securities’ four-point statement: fully bear the losses, fully cooperate with the audit

Facing pressure from the outside, Taishin Securities again publicly apologized on the 16th and provided a four-point explanation.

On April 14, the order reporting and trade confirmation reporting systems were abnormal. That day, contingency measures were activated immediately, and normal operation was restored at 12:17 p.m.

Most of the platform’s main functions have currently been restored. Some recurring/regular investment functions are still being adjusted, and the time of restoration will be announced separately.

Regarding the roughly 9,000 affected customers’ trades, Taishin Securities will handle the matter in the most favorable way for customers. The losses generated by the reverse offsetting of misposted accounts will be fully borne by the company.

As for the underlying cause of the system abnormality, Taishin Securities will fully cooperate with regulatory authorities’ audits and inspections, conduct deep reflections and improvements, and assume the responsibilities it should bear, devoting full efforts to safeguarding investors’ rights and interests and maintaining market order.

According to an explanation provided earlier by the Securities and Futures Bureau under the Financial Supervisory Commission, if the audit results determine that there was a violation of relevant internal control and internal audit regulations, the maximum fine under the law could be 4.8 million yuan.

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