Blue Ocean bows to US weekly transaction cancellation, promises to prevent recurrence

Brian Hindman, CEO of Blue Ocean, Apologizes for Last August's $630 Million U.S. Stock Order Cancellations
Promises Thorough Preparation to Prevent Recurrence
Requests Another Chance from Korean Investors

"I sincerely apologize to Korean investors. I promise that we have made thorough preparations to ensure that a large-scale order cancellation incident like the one in August last year will never happen again. Please give us one more chance."

Brian Hindman, CEO of Blue Ocean Technologies (Blue Ocean), an operator of a U.S. Alternative Trading System (ATS), said in an interview with Asia Economy on the 5th, "We are willing to do anything to resume services in Korea."

Brian Hindman, CEO of Blue Ocean, is being interviewed on February 5, 2025, at the Fairmont Hotel in Yeouido, Seoul. Photo by Kang Jin-hyung

Blue Ocean, which had been providing U.S. stock day market trading services in Korea, canceled all orders received after 2:45 p.m. on August 5 last year. The system could not handle the surge in orders from domestic investors triggered by the 'Black Monday' crash in Asian stock markets. With 19 affiliated securities firms in Korea, about 90,000 accounts experienced trade cancellations, and the canceled trade volume approached 630 billion KRW.

CEO Hindman explained the incident, saying, "Following the directive of Chairman Ralph Jarman, who closely monitored the increasing trading volume of the alternative trading system, we had been implementing the Members Exchange (MEMX) system used by regular exchanges since January last year. However, the Black Monday incident occurred ten days before the system was scheduled to go live." He clarified that the new platform, which could handle massive order volumes without overload, was set to launch in July, but due to delays in client companies migrating to the platform, the launch was postponed to the end of August, and the incident happened during that delay.

Hindman stated, "After the incident, to resume services, we have met all the financial authorities' requirements, including technical enhancements to the Blue Ocean system, compensation frameworks, and establishing communication channels. We even met with officials from the Korea Financial Investment Association this morning to appeal our efforts." He claimed, "Securities firms reacted positively to the compensation plan we prepared and are eager to resume services as soon as possible." He added that Blue Ocean has adopted 'Rule 18,' used by the New York Stock Exchange (NYSE), to specify compensation obligations for losses caused by system failures on its website and has made a dashboard available to users to monitor the current system status in real time.

He appealed, "However, despite clearly establishing this new compensation system institutionally and strengthening communication by opening a Korean office, for some reason, feedback from financial authorities remains distant. We hope the authorities recognize what we have done and how we have changed to resume services in Korea."

Kim Seok-jun, CEO of Blue Ocean North Asia, is being interviewed at the Fairmont Hotel in Yeouido, Seoul on February 5, 2025. Photo by Kang Jin-hyung

Vice President Kim Seok-jun, recently appointed as Blue Ocean's Head of North Asia, also attended the interview. He was assigned to the Seoul office with a special mission to resume Blue Ocean's day market services in Korea. Kim said, "Before the service suspension, Korea accounted for 65% of Blue Ocean's trading, making it an indispensable largest customer." He added, "On the 3rd, when global stock markets fluctuated due to U.S. President Donald Trump's tariff policies and the China-originated 'Deep Sea Shock,' about 50 million shares worth 1 trillion USD were traded during the day."

Both executives expressed confidence regarding competitors such as '24 Exchange (24X),' which had been mentioned as alternatives after Blue Ocean's Korean service suspension. CEO Hindman said, "Not only 24X but also Nasdaq and the Chicago Board Options Exchange (CBOE) have jumped to introduce 24-hour trading services, but they have made little progress due to technical barriers such as real-time trade reporting and market data transmission." He assessed, "It will be more difficult for competitors to enter than expected."

Vice President Kim also said, "Blue Ocean is a pioneering company that entered Korea first and has been running the U.S. stock day trading business for nearly four years, steadily progressing based on its own know-how." He concluded, "Even if competitors increase, this will guarantee business stability and continuity for market participants, so it will be a positive and healthy competition from the perspective of the entire market."

This content was produced with the assistance of AI translation services.