Samsung Securities, a South Korean investment firm, said this Wednesday that it has taken action against a number of employees involved in a dividends error last month. The ‘Fat Finger’ crisis led to the firm mistakenly issuing stock and giving it to their employees as dividends.
The error occurred last April when a trader was supposed to send 2.8 billion won ($2.6 million) worth of shares to employees as dividends. Instead, the trader sent 2.8 billion shares, worth approximately $100 billion.
Despite repeated warnings from the company, some employees quickly sold off approximately 5 million shares. The sixteen employees that sold off shares will either be suspended, dismissed or have their pay cut. Five others who attempted to sell off their shares will face similar punishments.
Understanding the Gaps in Forex TradingGo to article >>
Samsung did not specify which employees would face those punishments but did confirm that it had finished taking disciplinary action. The company’s decision not to provide more detailed information was a result of legal procedures now being pursued against those employees.
The trader that made the initial mistake will not be fired but will also face severe disciplinary action. A warning to anyone who has ever been half-asleep at work, the trader made the mistake by simply typing ‘shares’ in a box in which he should have written ‘won.’
As a result of the crisis, Samsung Securities has seen its value plunge. In the past month, the firm has seen 10 percent of its market value, equal to around $330 million, disappear.
The incident also caused a Korean regulator, the Financial Supervisory Service (FSS), to launch a prosecutorial probe. This probe has now expanded so that the FSS will inspect the internal control systems of over thirty other brokers in Korea.