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Mizuho's online stock platform crashes as IPO counter debuts

Tokyo

MIZUHO Financial Group Inc's online stock platform crashed Tuesday, making it harder for individual investors to trade on a day when a company whose initial public offering (IPO) it underwrote listed on the Tokyo Stock Exchange.

The fault was due to a network failure and the bank will report more details when available, Mizuho said in a statement, without specifying when the system will recover. Mizuho reported the issue to the Financial Services Agency (FSA), Atsushi Maruyama, a spokesman for the securities unit, said by phone.

Mizuho said the outage was unrelated to a major systems upgrade that the financial group is implementing. Japan's third-biggest bank by market value has suffered a series of information-technology mishaps that have drawn regulatory scrutiny in the past, including a costly "fat-finger" trading mistake at the securities arm in 2005.

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The glitch made it difficult for shareholders of Kokusai Pulp & Paper Co to trade the stock on its debut, Mr Maruyama said. Shares of the Tokyo-based paper wholesaler jumped as much as 37 per cent before closing 7.6 per cent higher. Mizuho was the lead manager of the offering.

Mizuho's clients "might have missed an opportunity to sell the shares at a high price", said Kazumi Tanaka, an IPO analyst at DZH Financial Research Inc in Tokyo.

"We were surprised to see this happen on our first day of trading," Haruyoshi Asada, a Kokusai Pulp executive who oversaw the listing, said by phone. He said it was too early to determine any impact on trading of the stock.

Mizuho's Net Club website for Internet trading serves 1.2 million account holders and has 130,000 users a month. While it's offline, individual investors can still trade by phone and at branches, Mr Maruyama said.

In December 2005, a typing error caused Mizuho Securities to mistakenly offer to sell 610,000 shares of J-Com Co for one yen each, instead of one share for 610,000 yen. The mistake cost the bank billions of yen and prompted the FSA to order it to improve its operations.

Mizuho implemented the first phase of its information technology upgrade earlier this month. BLOOMBERG