Former Samsung Securities Employees Convicted by Supreme Court for 'Ghost Stock' Sales

Samsung Securities Headquarters, Seocho-gu, Seoul / Photo by Honam Moon munonam@

[Asia Economy Reporter Kim Daehyun] Former and current employees of Samsung Securities who were prosecuted for selling 'ghost stocks' mistakenly credited due to a company error have been confirmed guilty by the Supreme Court.

On the morning of the 31st, the Supreme Court's 3rd Division (Presiding Justice Noh Jeonghee) upheld the original court's ruling, which sentenced eight defendants including a securities firm employee named Gu to suspended prison terms or fines on charges including violation of the Capital Markets Act.

The court stated, "There is no error in the original judgment that found guilt for the violation of the Capital Markets Act by using fraudulent means and breach of trust, nor did it violate the principles of logic and experience, exceed the limits of free evaluation of evidence, or misinterpret the legal principles regarding intent for illegal gains, property damage, and benefits."

Earlier, some Samsung Securities employees were prosecuted for selling stocks mistakenly credited to their accounts after the company made a 'dividend accident' in April 2018, when it intended to pay a cash dividend of 1,000 KRW per share to employee stock ownership but accidentally issued 1,000 shares per stock instead.

The 'ghost stocks' issued due to the dividend accident amounted to 2,812,950,000 shares. This quantity exceeded the stock issuance limit stipulated in Samsung Securities' articles of incorporation by several tens of times, and the stock price plunged by up to 11.68% compared to the previous day. However, since withdrawal was only possible after three trading days following the stock transaction settlement, the sales proceeds did not actually enter their accounts.

The first trial court ruled some of the charges guilty, stating, "Financial industry workers, whose essence is managing others' assets, fundamentally betrayed trust in professional ethics and morality." In the first trial, Gu and Choi were each sentenced to 1 year and 6 months in prison with a 3-year suspended sentence. Lee and former team leader Ji were sentenced to 1 year in prison with a 2-year suspended sentence, and the remaining four defendants were fined between 10 million and 20 million KRW each.

The second trial upheld the guilty verdicts of the first trial. Additionally, fines of 20 million KRW were imposed on Gu and Choi, who had received suspended prison sentences, and fines of 10 million KRW were added for Lee and Ji. However, both the first and second trials acquitted the defendants on charges of violating the Capital Markets Act by using deception and computer-related fraud due to insufficient evidence.

The Supreme Court also agreed with this judgment.

This content was produced with the assistance of AI translation services.