A letter American stock market index fell by nearly 1000 points

          -- the stock version "triggered a Steamed buns Massacre"?

Liu Chunquan lawyer  Shanghai Pacific law firm partner

According to media reports,In May 6th America a trader error to Million (million) the wrong letter write Billion (one billion), 16000000 to 160000000000, resulting in USA sell-off nearly 1000 points, become the stock version "triggered a bloody Steamed buns". It is reported America related agencies are working on related transaction is cancellation problem. American agencies how the matter was qualitative and processing, not only involves the parties rights, also involves the global e-commerce be just unfolding of the fundamental rules of the game problem. Perhaps this will form a milepost type case. Therefore, it is necessary to study the legal issues related to the.

Electronic trading, is a kind of typical electronic commercial contract format, the problem in the "format of electronic commercial contract and the Xu Ting case" in one article, there have been discussed. See the relevant reports of the incident, there are two questions to the author, the first is that there is no occurrence of misoperation technology really? Second, if the investigation confirmed that the operational errors, so whether we should cancel? In view of the transaction has caused nearly 1000 points stock index fell, endanger the stability of the market, affect the confidence of investors and the existing electronic securities trading system credibility, even America president intervene investigation, it is obviously the second problem is more urgent. Incidentally, this incident occurred, the legal issues of electronic commerce also evidence legal problems the author has been the industry's concern and research initiatives financial information in the financial industry, not to entertain imaginary or groundless fears! If this happened in China, we can quickly solve?

The first problem is the matter of fact, the main should look at the results of the survey. But, regardless of whether there is error, then, the computer information system exchanges and securities companies, should have the original data record. How to judge whether these data does exist operation error, not only to review records the data itself, is likely to survey, combined with other related data and information. In view of the general computer operation is usually the input digital Arabia (this is probably the world), therefore, the input alphabet and mistake 160 Million wrong the first letters into 160The billion argument, if the trader's company or the exchange did accept English letter input instruction, has the possibility; or enter Arabia number 160, selection of digital system unit, error million is regarded as the billion, is also possible, otherwise, in general, is not the probability of this situation the. Because the computer is not as manual entry, and Chinese have mature legal rules about the digital sensitive (such as specified in our negotiable instruments law case inconsistent bill is invalid), can solve this problem, the author even without knowing the details of the case involving the securities companies and the securities and stock exchange transaction instruction input however, America always boasted itself as a mature capital market, the input error is where all the common problems that may occur, should also have the related legal rules, possibility, therefore typo especially letters caused so much trading loss is not, but should be not too large is probability.

Secondly, about what is the operation mistake? There are also recognized standards and basis. Because of American stock exchanges and the main stock exchanges in the world, in accordance with the electronic transaction bidding rules. The transaction is generated automatically, and the following trade naturally affected by the transaction before, usually the transaction should be irreversible, otherwise once opened a precedent, can be found in the major loss using lengthy legal procedures or simply have the exchange meeting can cancel, it is to be severely shaken the credibility of electronic trading system the. In China stock market history, can now open to find unique precedent is illegal transactions last 8 minutes of the 327 national debt event ever create a great sensation in the exchange cancellation, it was also under the special background of case, and the global market relevance today and in the environment and the rule of law that are already cannot be mentioned in the same breath. The America exchange if cancellation, the affected USA investors probably won't leave the matter at that, and examine how disposal to withstand the law and in accordance with the business rules? We might rub one's eyes and wait.

Under the assumption that there exists a typo error, talk about second issues, namely, whether we should cancel? With our legal language, rescission or whether it should be declared invalid transactions can do? First of all, of course, we should study the local laws and the trading rules of the stock exchange, the specific to that the local authority, the author did not want to discuss. But the world is contract law although as like as chalk and cheese, also have a lot in common, such as the freedom of contract, the parties to respect the autonomy of the honest credit principle, etc.. These are the transmission performance of commercial law in the legal civilization. According to the theory, if you want to declare invalid transactions, that is must have the illegal facts are clear and definite legal basis, while typing errors unauthentic means such a thing, which belongs to the predictable phenomenon, and some exchanges have received the abnormal trading instructions to verify the working mechanism of traders to prevent error, if there is no compelling reason is declared invalid, controversial even I can hardly be avoided.

So, there may be changes or cancellation? This possibility was. Because if the input error, then result which belongs to the technical reason of untrue declaration of will, there is a major misunderstanding, which also caused unfair, such as Accenture, company share price drops to 1 cents per transaction, revoked in accordance with legal procedures, in the law is plausible. Of course, there are also some problems, electronic trading situation, all transactions are electronic data recording, how to identify and judge the "wrong"? But behind the transactions are automatically carried out in front of the transaction based, even if the revocation, also difficult to restore, because behind buying and selling may have been generated automatically, the legal procedure is tedious, and judicial organs of effective legal documents have legal effect, transactions and prices may not know the difference of thousands of miles. So, even allowing for such rescission, specific rules and procedures should be studied, and the stock exchanges around the world seem to lack the detailed rules.

The preliminary study showed that, for the existence of such problems of electronic commercial contract, should not be revoked as principle, to revoke exception. Even if there is a legal dispute, shall seek compensation for judicial relief through legal channels, has to happen before transaction belongs to an established fact, should in principle be recognized irreversible. Of course, taking into account the correlation between global financial transactions and the tremendous impact may be caused by, should also be allowed in a few extreme cases may be revoked, but this should be a very special case, shall meet the following conditions: one is the non securities transaction illegal intervention factors, such as the illegal invasion of computer software and hardware exchange system modified the resulting confusion in program trading, allow revocation; two is the information network system error caused the violation of the mandatory provisions of the law and the rules of the exchange, for example, assuming the stock exchange from 1 yuan 1000 yuan of output error that Xu Ting case, input into one thousand shares and 10000 shares of actual transaction system; three is even in the presence of the first two situations, should also resulted in a significant loss or influence or this possibility exists; four is a must go through the proper procedure, not by the exchange of an announced the cancellation on a simple matter. For a more detailed rules, may be even to this event as an opportunity, more in-depth study and discussion.

The author suggested again that, due to the application of financial informatization, electronic commerce law and the law of the financial industry, has been imminent. The so-called input error caused the Wall Street stock plummeted 1000 point event, regardless of the final survey America Congress results prove that is true, the world sounded the alarm. The global stock exchange and the legislature should consider through legal means to enforce security company IT software and hardware and the improvement of business rules, to prevent future such things to happen again. But as the day to the man, if it happens like this, trading and financial authorities should also have to deal with the plan, in order to avoid a sudden incident, but rather in disarray

Author Department of law, Shanghai Pacific Law Firm partner.