Samsung Securities Ordered to Compensate for "Ghost Stock" Dividend Error... Appellate Court Upholds Ruling

Ordered to Compensate Half of Losses, Following First Trial

Samsung Securities has been ordered by an appellate court to compensate investors for half of their losses caused by the "ghost stock" dividend incident.

According to legal sources on March 28, the Seoul Central District Court’s Civil Division 2-3 (Presiding Judge: Ye Jihui) ruled, as in the first trial, that "Samsung Securities must pay approximately 28 million won to Investor A," in a lawsuit filed by Investor A against Samsung Securities for damages.

In April 2018, Samsung Securities attempted to pay out employee stock ownership dividends, but an employee mistakenly entered "1,000 shares" instead of "1,000 won per share." As a result, a total of approximately 2.81 billion shares worth 112 trillion won at market value were erroneously deposited into the accounts of employees holding employee stock.

The employees sold a total of 5.01 million shares on the market, causing the share price to plunge by as much as 11.7% during trading hours. However, the company intervened and none of the employees were able to keep the proceeds from the sales.

In June of that year, Investor A filed a lawsuit seeking compensation of approximately 60 million won, claiming to have suffered damages from the Samsung Securities dividend incident. In September 2021, the first trial ruled that the company should pay half the amount, approximately 28 million won.

Although Samsung Securities appealed, the appellate court reached the same conclusion. The court stated, "Samsung Securities failed to fulfill its duty of care as a good manager to ensure safe electronic financial transactions," and added, "The company’s lack of internal controls over the dividend system led to the employee’s dividend error incident."

This content was produced with the assistance of AI translation services.