Supreme Court orders Samsung Securities to pay damages to NPS over 2018 dividend error

On Wednesday, the Supreme Court ordered Samsung Securities to compensate the National Pension Service (NPS) with 1.86 billion won ($1.3 million) for a 2018 dividend error resulting from a stock issuance mishap. The top court sided with the NPS in a damages claim filed against the brokerage firm due to a "fat-finger" error made by an employee on April 6, 2018.

The error occurred when the Samsung Securities representative incorrectly entered 1,000 shares instead of 1,000 won per share in the compensation plan, leading to the issuance of 2.8 billion shares, valued at approximately 112 trillion won, which were purely fictitious. Consequently, employees who received these non-existent stocks promptly sold them in the market, causing Samsung Securities' share price to plummet by around 12 percent on that day.

In response to the significant stock market decline, the NPS filed the lawsuit, seeking 29.9 billion won in damages. The Supreme Court affirmed earlier court orders requiring Samsung Securities to pay 1.86 billion won in damages, determining that there was a strong likelihood of a causal link between the error and the market's adverse reaction.