Supreme Court orders Samsung Securities to pay damages to NPS over 2018 dividend error
Samsung Securities headquarters in Seocho District, Seoul / Courtesy of Samsung Securities
The Supreme Court on Wednesday ordered Samsung Securities Co. to pay the National Pension Service (NPS) 1.86 billion won ($1.3 million) in damages over a 2018 dividend error by an accidental stock issuance.
The top court ruled in favor of the NPS in the damages suit filed against the brokerage firm stemming from a "fat-finger" error committed by an employee at the firm on April 6, 2018.
The stock blunder took place when the Samsung Securities official typed in 1,000 shares instead of 1,000 won per share in dividends that were to be paid to employees under a compensation plan.
As a result, the company issued 2.8 billion shares worth about 112 trillion won that only existed on paper, and some employees who received the stocks quickly sold them in the market. Shares of Samsung Securities nose-dived about 12 percent on the day.
The NPS filed the suit in response to the sharp stock price fall, claiming 29.9 billion won in damages.
The Supreme Court upheld lower court rulings that ordered the brokerage firm to pay 1.86 billion won in damages, ruling that there is a "strong" likelihood of a causal relationship between the negligence of the firm's employees and the financial losses suffered by the NPS.
During the case's first instance trial, a lower court calculated the damages by limiting the company's liability at 50 percent, ruling that it would be harsh to hold the company entirely responsible for the losses.
Both sides appealed the ruling, and an appellate court upheld the lower court decision before the top court's final ruling.