A $190 Million Misclick for T. Rowe Price (fortune.com) 35
An anonymous reader writes: This week a court ordered restitution for any investors who'd opposed the 2013 buyout of Dell Inc., approximately $3.87 per share, plus interest. The investment firm T. Rowe Price was a vocal opponent of the deal, and had over 30 million shares scattered throughout its mutual funds. But an automated system at T. Rowe Price used its default setting -- which indicated support for the buyout -- an error which is now estimated to have cost the firm close to $190 million.
Dell won't receive the money "because, in essence, they checked the wrong box," reports Fortune. And the Baltimore Sun adds that the firm now faces the prospect of class action lawsuit from angry investors.
Dell won't receive the money "because, in essence, they checked the wrong box," reports Fortune. And the Baltimore Sun adds that the firm now faces the prospect of class action lawsuit from angry investors.
Re:they probably saved money (Score:5, Insightful)
They get paid either way. If the computer does it, they get paid. If they do it, they get paid. If they screw up, they get paid.
Heads they win, tails you lose.
T. Rowe Price average expenses 1%
Vanguard average fees 0.18%
If you're paying them 1% a year with a gross return that is only 4% then you are paying them 25% of your profit.
Best to check on those fees before you invest.
Re: they probably saved money (Score:1)
No misclick was involved (Score:2, Informative)
If it is a preselected option in an automated system used by default, it's not a misclick - rather a badly setup config.
Re: (Score:2)
The same kind of idiots who turn the background grey?
$190 million? (Score:4, Funny)
Why would they? (Score:5, Insightful)
Dell won't receive the money "because, in essence, they checked the wrong box," reports Fortune.
Why Dell would be receiving money in any case here? It sounds more like T. Rowe Price won't be getting any money from Dell because of T. Rowe Price's error.
Re: (Score:3, Funny)
EditorDavid used to work for T. Rowe Price, he's brought his attention to detail to /.
Re:Why would they? (Score:5, Informative)
AC is correct, the summary should have said that T. Rowe Price is going to miss out because they did not oppose the buyout when it came time to vote.
Why is this Dell's problem? (Score:3)
It's not Dells probably that TRP screwed up. If you're going to set up an automated trading system, you're still responsible if that system screws up. Period.
It's beyond frustrating that companies like these get a free pass when they make errors that cost millions or billions of dollars. Then again, this is the US, so who am I trying to kid?
Re: (Score:3, Informative)
RTFA, the summary is wrong and makes no sense. Dell lost the lawsuit to shareholders who voted against the deal for undervaluing shares. TRP is not eligible for the winnings from that lawsuit because their computer made the mistake of voting for it. TRP may be liable to its investors because they are losing out on $190 million due to the computer glitch because without it the company was supposed to vote against the deal and be eligible for the lawsuit money.
Re: (Score:2)
Didn't you know can pass shit like "oops, takesies backsies" in a court of law? Oh wait, you must be a common citizen. Yeah, your livelihood can be gyp'd in a blink and we're still gonna do jack all. We'll be forgiving if you did something retarded to cause it yourself though - and by 'forgiving' I mean go from Zero Fucks to subzero.
If only the shareholders were able to carry firearms, they could have defended themselves. In the majority of cases, merely brandishing the firearm is sufficient to discourage the management company from robbing the investor blind.
That's a terrible summary (Score:5, Informative)
Proper summary:
The SLP buyout of Dell has been found to be underpriced, and SLP will have to make restitution to those who opposed it.
TRP doesn't get any of that money because they screwed up and didn't register as opposed to the buyout.
I've no idea if it's reasonable that SLP has to pay out to those who opposed the buyout.
It's perfectly reasonable that TRP gets nada, since they screwed up their end of things.
Wow, thanks. (Score:2)
The summary made no sense at all.
Also, it seems there seems to be at least one party that bought DELL stock AFTER the announcement, registering an objection to the sale and hoping to get such a settlement if the sale went through. I don't know either whether it is reasonable that SPL has to pay those who were opposed, but it makes no sense to me that they should pay those who bought after there was news of the acquisition attempt.
missing the point? (Score:3)
doesn't anyone find it funny that a firm that moves a lot of money and employs a lot of people finds in necessary to make a bot that always says "yes, approve this buyout"
Re: (Score:3)
Nobody crying.... (Score:3)
Honestly TRP deserves the loss as their kind are pretty scummy. and if someone did not check the settings and they rely on pure automation like that... They absolutely deserve losses of that magnitude and higher.
Re: (Score:2)
As someone who has half of his retirement funds with them, I say go to hell with your simplistic view that things like this only effect rich people.
Re: (Score:3)
This has nothing to do with trading or algorithms.
This was a mistake made by their system that handled shareholder votes about corporate buyouts interacting with a lawsuit.
Re: (Score:2)
Great. Then we can all save time and money by getting rid of all the error correction algorithms in software and avoid expensive ECC memory.
How it really happened. (Score:2)
It's a good deal for us, let's proceed with it.
Later on there's more money for people who opposed
Hey, uh, we had a glitch in our system that made us send in the wrong response.
Lots of Information Left Out (Score:1)