Attention FAE Customers:
Please be aware that NASBA credits are awarded based on whether the events are webcast or in-person, as well as on the number of CPE credits.
Please check the event registration page to see if NASBA credits are being awarded for the programs you select.

Typo Leads Samsung to Distribute $105 Billion in Stock That Does Not Exist

By:
Chris Gaetano
Published Date:
Apr 13, 2018
mistake-3085712_1920

If you ever needed a reason to check for typos before hitting send, it's this: Samsung has accidentally distributed $105 billion in stock that, technically, does not exist, according to Bloomberg. The company originally intended to award employees ₩1,000 (about 93 U.S. cents) per share in dividends as part of a company compensation plan, but a "fat finger error" (a fancy finance way of saying 'typo') instead caused all those employees to get, instead, 1,000 shares in Samsung Securities, a financial investment company that's owned by electronics giant Samsung. This led to the distribution of 2.83 billion shares worth more than 30 times the company's total market value. 

Oops. 

It gets worse from there. Because the shares were awarded based on a typo instead of a deliberate awarding of actually existing securities, this meant the shares awarded to the workers didn't technically exist. However 16 employees sold them anyway, which in turn, led those who had actual stock to sell their shares too. Samsung's stock value lost 12 percent in the span of mere minutes. 

Needless to say, people are very, very angry at everyone who was involved: the company for making the mistake, the employees who capitalized on it, and the regulators who allowed the entire thing to happen. Samsung Securities, for its part, has promised to compensate any retail investor who had been holding company shares prior to 9:35 a.m. on April 6, when the first sale of ghost shares took place, and ended up selling those shares as prices plummeted. They will use the intraday high price from that day. 

Click here to see more of the latest news from the NYSSCPA.