It started with a $105 billion blunder, and then it got worse.
Bloomberg News reports that someone at Samsung Securities Co., one of South Korea’s largest brokerages, was trying to pay employees 93 U.S. cents per share in dividends under a company compensation plan. Somehow, they gave them 1,000 Samsung Securities shares instead. In total, the company distributed 2.83 billion shares, worth - on paper - about $105.1bn. That was more than 30 times the company’s market value.
The fact that the shares didn’t exist didn’t stop 16 employees from selling them. And that spurred a rout in Samsung Securities’ stock. It plunged as much as 12% in the space of minutes on April 6, the biggest decline since the global financial crisis. Many retail investors got burned.
Then the recriminations started. People are angry with Samsung Securities. They’re angry with the employees who sold the phantom shares. And they’re angry with the government and regulators for the system that allowed people to dump stock they didn’t own - and wasn’t even real.
Hit the link below to access the complete Bloomberg News article: