SEOUL, Jul. 26 (Korea Bizwire) — The financial regulator on Thursday ordered Samsung Securities Co. to suspend part of its operations for six months as punishment for the brokerage’s “fat-finger” error that sparked a massive public uproar.
Samsung Securities will be banned from offering its services to new investors for six months from Friday, the Financial Services Commission (FSC) said in a statement.
The FSC also ordered the brokerage’s chief executive, Koo Sung-hoon, to be suspended from his duties for three months, the FSC said.
Eight executives of Samsung Securities were reprimanded and the FSC fined the brokerage 144 million won (US$128,651), according to the statement.
Samsung Securities has been under a firestorm of criticism after it mistakenly paid stocks to its employees as dividends in April.
The brokerage had originally planned to pay dividends of 1,000 won to its employees. However, it mistakenly paid 1,000 shares for each stake owned by its workers.
The chaos happened after a Samsung Securities trader made a keyboard entry mistake, typing “shares” instead of “won” in Korean when sending the dividends to employees.
The brokerage accidentally issued 112 trillion won worth of “ghost” stocks, and 16 employees at Samsung Securities sold off a combined 5.01 million shares. The sell-off occurred despite advisories about the mistake being sent to employees, raising concerns about the brokerage’s trading system and moral hazard among its workers.