May 14, 2005 in Business

Nasdaq sends out erroneous quotes

Associated Press
 

NEW YORK — A computer problem at an unidentified stock trader caused erroneous, exaggerated prices – some as high as $950 per share – to be posted to the Nasdaq Stock Market Friday morning for 1,680 different stocks, a spokeswoman for the Nasdaq said.

The Nasdaq said trades using possibly incorrect quotes occurred in 184 stocks between 9:19 a.m. and 9:40 a.m., when the problem occurred. Those transactions, which were made 15 percent above or below the previous day’s closing price, will be “broken” — the buyer will get his or her money back, and the stock will revert to the seller.

The rest of the affected stocks had erroneous bids placed on Nasdaq’s electronic order books, but no trades were executed at the incorrect prices.

The problem was corrected, Nasdaq spokeswoman Bethany Sherman said. The Nasdaq posted a list of affected stocks on its Web site Friday.

The problem arose when a broker linked to the all-electronic Nasdaq system inadvertently put out bids for stocks that were substantially higher than the prices in which those stocks normally trade.

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