3 ms·

So one place I worked might win some sort of prize for the dumbest way to burn $5m with a memory leak. So back in the 90s the printer driver in Solaris had a m

So one place I worked might win some sort of prize for the dumbest way to burn $5m with a memory leak. So back in the 90s the printer driver in Solaris had a memory leak[1]. At the time I was a contractor for a big bank that is sadly/not sadly no longer with us any more. This was when the status of faxes in confirming contracts hadn't been sufficiently tested in court so banks used to book trades by fax and the system that sent the fax would also send a document to a particular printer which would print the trade confirm out and there was some poor sap whos job consisted of picking up the confirms from this printer, calling the counterparty and reading them out so that they were all on tape[2] and legally confirmed. Anyhow one day the memory leak caused the printer driver to fall over and fail to print out one of the confirms so the person didn't read it out on the telephone. The market moved substantially and the counterparty DKd the trade[3]. A lot of huffing and puffing by senior executives at the bank had no effect and they booked a $5m loss and made a policy to never trade with that particular bank again[4]. The fax printer job was moved to windows NT. [1] According to the excellent "Expert C programming" this was eventually fixed because Scott McNealy, then CEO of Sun Microsystems had been given a very underpowered workstation (as CEO) so was affected a lot by this problem and eventually made enough of a fuss the devs got around to fixing it https://progforperf.github.io/Expert_C_Programming.pdf https://progforperf.github.io/Expert_C_Programming.pdf [2] Calls in the securities division of banks are pretty much always recorded for legal and compliance reasons [3] DK stands for "Don't know". If the other side says they "don't know" a trade they are disputing the fact that a contract was made. [4] Which I'm sure hurt us more than it hurt them as they could just trade somewhere else and pay some other bank their commission

fbdab103 2y ago
>...they booked a $5m loss and made a policy to never trade with that particular bank again Maybe I am too cynical, but would many businesses retroactively agree to a deal which would cost them a ton of money? If the Process requires Is dotted, Ts crossed, and a phone call confirmation which was never placed -why eat the loss when the other party should own the error? Citi just had a lawsuit because of paying back a loan too quickly. I expect everyone in finance to play hard ball on written agreements when it works in their favor.
- seanhunter 2y ago
  Sometimes it happens. Particularly in big US old school broker-dealers, "Dictum Meum Pactum"[1] is something some people take very seriously especially since you will have a fruitful (if adversarial) working relationship over many years and may need someone to do you a personal favour in the future (eg giving you a job etc). For example I know of one US investment bank where a very large options position was "booked" by a trader using a spreadsheet rather than in the official booking system which meant that the normal "exercise and expiry" alerts didn't go off to warn people when the trade was about to expire. The trader in question went on holiday and as a result the trade expired more than a billion dollars[2] in the money. The CEO of the bank called up the counterparty and successfully persuaded them to honour the trade and pay up even though it had actually expired and everyone knew there was no legal obligation. As it was explained to me at the time, the counterparty had probably hedged the trade so was not scratching around the sofa trying to find the money. [1] "My word is my bond" [2] Yes. With a b.

fbdab103 2y ago

>...they booked a $5m loss and made a policy to never trade with that particular bank again Maybe I am too cynical, but would many businesses retroactively agree to a deal which would cost them a ton of money? If the Process requires Is dotted, Ts crossed, and a phone call confirmation which was never placed -why eat the loss when the other party should own the error? Citi just had a lawsuit because of paying back a loan too quickly. I expect everyone in finance to play hard ball on written agreements when it works in their favor.

seanhunter 2y ago
Sometimes it happens. Particularly in big US old school broker-dealers, "Dictum Meum Pactum"[1] is something some people take very seriously especially since you will have a fruitful (if adversarial) working relationship over many years and may need someone to do you a personal favour in the future (eg giving you a job etc). For example I know of one US investment bank where a very large options position was "booked" by a trader using a spreadsheet rather than in the official booking system which meant that the normal "exercise and expiry" alerts didn't go off to warn people when the trade was about to expire. The trader in question went on holiday and as a result the trade expired more than a billion dollars[2] in the money. The CEO of the bank called up the counterparty and successfully persuaded them to honour the trade and pay up even though it had actually expired and everyone knew there was no legal obligation. As it was explained to me at the time, the counterparty had probably hedged the trade so was not scratching around the sofa trying to find the money. [1] "My word is my bond" [2] Yes. With a b.