South Korea's Supreme Court confirmed a compensation ruling of approximately 1.8 billion won [1] against Samsung Securities for a massive clerical error.

The decision marks the end of a seven-year legal dispute involving the National Pension Service. It highlights the severe market volatility that can result from internal systemic failures at major financial institutions.

The case stems from an incident in April 2018 [1] when employees at Samsung Securities mistakenly distributed dividends. Instead of issuing 1,000 won per share, the system allocated 1,000 shares per employee [1]. This error resulted in the creation of approximately 28 billion "ghost shares" [1], which was more than 30 times the company's actual issued share count [1].

While the company should have distributed roughly 28 billion won in cash [1], the erroneous issuance of shares bypassed internal controls. Kim Ki-sik, the Financial Supervisory Service governor at the time, said ghost shares exceeding 30 times the issued stock were created and not filtered by the internal system [1].

The market reacted sharply to the news of the over-issuance. Samsung Securities saw its stock price drop by more than 10% [1] during a temporary plunge following the discovery of the error.

The National Pension Service, a public pension fund based in Seoul, sued the firm for losses incurred during the volatility. The Supreme Court finalized the compensation order in 2026 [1], concluding the litigation that began shortly after the 2018 distribution error.

Samsung Securities employees were identified as the cause of the initial clerical mistake [1]. The court's decision to award 1.8 billion won [1] to the pension fund serves as a legal resolution to one of the most prominent administrative failures in the Korean trading market.

“Ghost shares exceeding 30 times the issued stock were created and not filtered by the internal system.”

This ruling establishes a legal precedent for institutional accountability regarding algorithmic and clerical errors in dividend distribution. By holding Samsung Securities liable for the losses of the National Pension Service, the court emphasizes that internal systemic failures—specifically those that bypass risk controls to create synthetic equity—are compensable damages for institutional investors.