South Korean prosecutors have raided the headquarters of Samsung Securities amid a probe into a massive stock issuance error. Here's why 1,000 shares instead of 1,000 won per share can make a huge difference.
South Korean law enforcement officers searched Samsung Securities' head office on Monday as part of their investigation into the brokerage's recent fat finger blunder.
Korean newspapers reported investigators from the Seoul Southern Prosecutors' Office were sent to search the premises in Seocho and four other branches to confiscate evidence, including documents and digital files.
Prosecutors are probing a massive stock blunder that happened on April 6, in which an official at Samsung Securities by mistake typed in 1,000 shares instead of 1,000 won per share in dividends that were meant to be paid out to employees under a company compensation plan, the Yonhap news agency reported.
As a result of the mistake, the brokerage house issued 2.8 billion shares to workers — that's more than 30 times the number of its outstanding shares and at least theoretically worth some $100 billion (€85 billion).
The blunder had caused a public outcry in South Korea, particularly after it was discovered that some employees quickly sold off their shares in a bid to make a quick buck.
The country's financial watchdog said it had found that over 20 workers traded or attempted to sell shares to make a profit from the error.
When the fat finger blunder came to light, Samsung Securities promised to rebuild its internal control process and set up a fund to support investors damaged by financial accidents.
Shares of the brokerage house plunged 12 percent on the day it made the error, but were little changed on Monday morning.
hg/jd (Reuters, Yonhap)