After a “fat finger” error last week, South Korea’s largest pension fund is severing ties with Samsung Securities.
The incident occurred Friday, when a Samsung employee accidentally issued 2.8 billion shares to employees instead of the dividend payouts promised to workers part of the stock ownership scheme. However, the situation did not become apparent until 37 minutes later, when the company discovered that 16 employees had hastily sold off their erroneous stock, valued at $186.9 million.
While last Friday may have been a great day to be a Samsung employee, Samsung Securities has fallen 10% and lost roughly $330 million from its market value. The titanic mistake was also the straw that broke the camel’s back for the 633 trillion won ($595 billion) National Pension Service, as the world’s fourth-largest pension fund stopped orders with the Seoul-based fintech company almost immediately. A spokesman told The Wall Street Journal that “concerns of poor safety measures following the financial incident” was the key reason it stopped orders with the company.
Worth nearly $105 billion, the mistaken 2.8 billion shares represented more than 30 times the number of Samsung’s outstanding shares. Samsung Securities has launched an investigation into its internal systems and controls and has also promised to compensate investors for the dividend debacle. According to the WSJ, the Korea Securities Depository said the perilous transactions involving the Samsung shares had been fixed.
The Samsung employee who made the mistake, as well as those who cashed in after being told not to, have been temporarily suspended.
Tags: National Pension Service, Samsung Securities, South Korea