Samsung Securities

Samsung Securities — one of the largest South Korean broker companies. Enters about Samsung Group conglomerate.

History

2018: Wrong issue of actions to employees for $104.8 billion

In April, 2018 Samsung Securities mistakenly distributed to the employees actions more than for $100 billion. Some workers managed to earn from it.

According to Bloomberg news agency, the company made a mistake in settling with the employees who are at the same time its shareholders. On account of dividend payout they had to receive 1 thousand Korean wons ($0.93) for an action, but as a result of an error received 1000 stocks Samsung Securities.

The division of Samsung mistakenly issued to employees of an action for $105 billion

In total 2.8 billion "illusive" actions for the amount about 111.8 trillion wons were produced (about $104.8 billion at the rate of for April 13, 2018). The total cost of incorrectly issued securities approximately by 30 times exceeds the price of the existing actions.

16 employees of Samsung to whom issued actions by mistake within several minutes managed to sell the part of securities, having earned about $187 million. Half an hour more later representatives of Samsung managed to block sales opportunity of actions.

After it became known of wrong distribution of the stocks Samsung Securities, their rate decreased almost by 12% in only several minutes. This recession was the strongest from the moment of financial crisis of 2008.

It is an incident can have far-reaching negative effects. So, some pension funds showed willingness to stop cooperation with Samsung Securities, and the government of South Korea considers the possibility of an exception of the company of the list of the main dealers on government bonds. The final decision will be about it made later.

The research associate of the Korean institute of the capital market Hwang Seiwoon considers that the incident can become a reason for large-scale checks of transaction processing systems by South Korean brokers.^[1]

Notes