Samsung Securities faces W10b loss on ‘ghost stocks’
[THE INVESTOR] Samsung Securities has decided to charge 16 employees with billions of won in losses following their massive sell-off of stocks that were mistakenly wired to them last week, according to industry sources on April 10.
Even though the brokerage declined to comment on the exact amount, market estimates suggest the mistake cost it about 10 billion won (US$9.40 million) as it bought back the “ghost stocks” at a higher price on April 9.
Samsung Securities wrongly issued 2.8 billion shares on April 6, when it was supposed to pay dividends worth 2.8 billion won to employees under a stock ownership plan. Despite warning notifications, the 16 employees, including some ranking officials and analysts, sold 5.01 million shares, worth about 200 billion won.
Following the sell-off for about 37 minutes earlier in the day, the company’s share price tumbled almost 12 percent at one point. Over the past three days, the stock has shed about 7 percent, knocking off more than 230 billion won from its market value.
Amid mounting criticism against the moral hazard of employees and the brokerage’s lax monitoring system, the firm has suspended all the 16 employees from duty. Sources say if they are found to have sold the stocks intentionally, they could face embezzlement charges.
“The employees agreed to compensate the losses. If they refuse, we will file complaints against them,” a company official said on condition of anonymity.
As of 3 p.m., Samsung Securities shares were trading at 35,650 won, down 4.3 percent from the previous day.
By Lee Ji-yoon (email@example.com)