“Who stops the securities trading market? It's a knife-less scam. They've even invalidated contracts that were already executed, so I guess I can also cancel any future stock purchases and say they were invalid if I lose money. Does it make sense to turn a blind eye to this scam?”'August 5 U.S. stock rollback victim group' post shared in the Kakao open chat room
Since the Black Monday (stock market crash) incident on August 5, the resumption of the weekly trading service for U.S. stocks has been silent for four months. Both Blue Ocean, the American alternative trading system (ATS) that unilaterally canceled orders, and the securities firms that facilitated the transactions have shown an attitude of “no responsibility.” It is true that domestic securities firms are not liable according to the terms and conditions, and this has caused victims who were planning to file complaints with the financial authorities and lawsuits to gradually lose momentum.
According to the financial authorities on the 22nd, the processing of complaints related to this incident submitted to the Financial Supervisory Service in September is expected to take about a year before results are obtained. The Financial Supervisory Service has currently requested basic data from three securities firms, including KB, NH Investment & Securities, and Samsung Securities. However, as they are processing the complaints that came in earlier in order, they stated it would take longer to review the documents.
An FSS official noted, “The FSS receives about 100,000 complaints a year, including dispute resolution cases,” and added, “The responses to complaints received at the end of last year and the beginning of this year are finally being made, so the processing for (ATS transaction cessation cases) is expected to take about a year.”
After the Kospi index dropped over 8% in a single day on August 5, domestic investors flocked to the U.S. stock market. When the order volume surged to the point of being unmanageable, Blue Ocean canceled even the executed orders. All losses and profits generated from those transactions were also canceled. The number of affected accounts reached over 90,000, with damages amounting to 630 billion won.
Subsequently, investors formed a Kakao open chat room called 'August 5 U.S. stock rollback victim group' and have engaged in collective action. However, there have been no results so far. They filed complaints with the securities firms to seek compensation for their losses right after the incident but received responses indicating that compensation would be difficult, citing that the issue arose from Blue Ocean's unilateral cancellation of transactions, and therefore, the securities firms had no liability.
Investors submitted complaints against three securities firms, including KB, NH Investment & Securities, and Samsung Securities, to the FSS. However, this too has encountered difficulties. It would take a year for the FSS to review these complaints, and there is no guarantee that the Dispute Resolution Committee would necessarily convene. Additionally, since this incident is unprecedented, the FSS has no precedents to refer to.
Given the circumstances, some investors plan to initiate lawsuits against the securities firms. However, this also appears to be a challenge. They created a chat room only for those who certified their losses for collective lawsuits, but only about 10 people participated, and even those few have been inactive. The chat room, which had over 200 members right after the incident, has now dwindled to about 130.
Amidst the indifference from Blue Ocean and the securities firms, the U.S. stock weekly trading service of domestic securities firms remains suspended even four months later. It has been understood that after sending a statement on August 14 from the Korea Financial Investment Association, Blue Ocean responded that it has “no compensation responsibility according to local ATS regulations,” and has shown no significant signs of improvement since.
A source from the financial investment industry noted, “Even if we receive a response from the FSS after a year, it remains uncertain whether the Dispute Resolution Committee will reach a satisfactory agreement between the securities firms and the investors,” and added, “It seems unlikely that investors will be able to obtain the answers they desire even if legal disputes arise.” They also remarked, “These days, related articles are coming out less frequently, and there seems to be a gradual atmosphere of being forgotten.”