MERITZ Securities canceled a transaction after incorrectly calculating the number of merger shares for Hedema Maritime Holdings (HMR), a company listed on the Nasdaq.
According to the financial investment industry on the 21st, HMR began trading on the Nasdaq the previous day. It was the first trading day after the merger with existing Nasdaq-listed company MiGlobal (MGOL).
The merger ratio was 30 to 1, meaning that existing shareholders who held 30 shares of MiGlobal received 1 share of the newly listed HMR.
However, between 6 p.m. and 7:25 p.m. the previous day during pre-market trading, HMR shares were traded at MERITZ Securities without the exchange ratio being applied. This was a result of a simple ticker change that led to confusion.
Customers who held 30 shares of MGOL in their MERITZ Securities accounts were simply displayed as having 30 shares of HMR, resulting in a transaction of a total of 150,000 shares being sold in the market.
MERITZ Securities later identified the problem, suspended the transaction, and rolled back the orders received over the 1 hour and 25 minutes. They also repurchased 130,000 shares after the regular market opened.
MERITZ Securities provisionally reported that around 30 accounts were affected during the time the problematic transaction occurred, estimating the total losses at about 10 million won. A MERITZ Securities representative noted, "We plan to assess the exact losses and negotiate compensation with our customers."
However, investors who traded through other securities firms, not MERITZ Securities, are also expressing dissatisfaction. They claimed they suffered losses after buying HMR shares following its price rise, unaware that MERITZ Securities had repurchased incorrectly ordered HMR shares during the regular trading session. The HMR stock started trading at $0.4 the previous day, rose to $0.4599, and then dropped, closing at $0.37.