Most of us have a vague sense that huge, multibillion-dollar companies have, like, systems in place to prevent them from making the sort of idiot mistakes that we, normal people, make. Not necessarily true!
I don’t know that this story has any deeper meaning except to reassure us all that even enormous financial firms do things that are the equivalent of leaving your car keys in the freezer, but: the Wall Street Journal reports today on how the investment firm T. Rowe Price cost itself $200 million by accidentally voting the wrong way on a 2013 proposed buyout of Dell. By “accidentally voting the wrong way,” we mean that the company spoke up against the buyout plan and made a big show of opposing the buyout plan and then just... voted for it.
The money manager has blamed its vote in favor of the deal on a back-office error. The default stance of T. Rowe in merger votes—like many large investors—is to support management, which in Dell’s case recommended in favor of the deal. So T. Rowe Price’s computerized system spit out instructions to vote “yes” that weren’t manually overridden before the final vote, according to court filings.
This human error cost T. Rowe Price $190 million.
Sometimes you just have to laugh because life is funny :)