On Friday, July 27, Samsung Securities Co., Ltd. has faced a crisis regarding an error made by an employee which includes a $105 billion “ghost stock” blunder, causing its Chief Executive Officer Koo Sung-hoon to vacate his position.
Samsung Securities was obliged to pay a penalty of $129,000 to South Korea’s financial regulator as a result of the wrongdoings of its employees. Along with this, the company was prohibited to have new clients for the next six months.
The error has occurred when the person involved released 2.8 billion shares to 2,000 employees, which was much bigger to its current number of shares. The employee was supposed to release 93 U.S. cents or about 1,000 won per share in dividends under the company’s compensation plan. To make the situation even worse, some of those who received a share have sold it immediately even upon knowing that something is wrong.
As a result, those employees who act indifferently to what they were supposed to do upon acquiring the shares have to face the consequences of their actions. Around thirteen employees were involved in the said event, all of which was fined by the financial regulator; each one must pay $27, 000 or 30 million won as a penalty.
With the recent events, the company is making sure that none of this will happen again. The company even stated that they will start to make new standards for them and their employees to follow.