Prosecutors Launch Probe into Samsung Securities' Stock Blunder | Be Korea-savvy

Prosecutors Launch Probe into Samsung Securities’ Stock Blunder

(image: Kobiz Media / Korea Bizwire)

(image: Kobiz Media / Korea Bizwire)

SEOUL, May 24 (Korea Bizwire)Prosecutors said Thursday they launched an investigation into officials of Samsung Securities Co. over the massive dividend error in April that jolted the local financial market.

The Seoul Southern District Prosecutors’ Office said a probe has begun based on the complaint filed by the Financial Supervisory Service early this month regarding the accidental issuance of stocks worth nearly 113 trillion won (US$104 billion) on April 6.

The blunder happened when an official at the brokerage house by mistake typed in 1,000 shares instead of 1,000 won per share in dividends that were to be paid to employees under a company compensation plan.

As a result it issued 2.8 billion shares that only existed on paper. But some of the workers who received the stocks quickly sold them in the market.

Shares of Samsung Securities nose-dived about 12 percent on the day it made the error.

The FSS has conducted an inquiry into what’s now dubbed the “fat-finger” case at the major securities firm. It found possible wrongdoing by 21 officials at the company and requested the prosecution launch a probe against them.

Of them, 16 officials who received the stocks by error sold them off knowing that they were mistakenly issued, while six others who also knew it was an error tried to sell the stocks but failed.

Prosecutors said they plan to bring the officials in for questioning soon.


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