At Kiwoom Securities, forced liquidation trades that investors did not want occurred. The investor deposited margin to prevent a forced sale, but because a system error did not reflect this situation, the shares were forcibly disposed of. Kiwoom Securities is compensating affected customers, but it has not even properly identified the exact scale of the damage.
A forced sale is when an investor borrows money from a securities firm to buy stocks and, if the collateral ratio falls below the standard due to a price drop, the firm forcibly disposes of the shares. When the collateral ratio falls, the firm demands additional margin from the investor, and if the investor deposits it, a forced sale does not occur.
According to Kiwoom Securities on the 30th, while the company was taking steps the previous day to lift forced sales, an intermittent processing delay caused forced sales to occur in some customer accounts. This means shares were forcibly disposed of even though investors had deposited margin to avoid a forced sale. When a securities firm forcibly sells shares, it sells them at a price lower than the market price, so investor losses inevitably grow.
A Kiwoom Securities representative said, "We are informing customers of this and proceeding with compensation," but added that the specifics of the damage are "still being identified."
Investors who were forcibly liquidated are protesting. It is because investment losses were finalized against their will. In response, Kiwoom Securities plans to compensate the expense necessary to return to the situation before the forced sale occurred.
However, Kiwoom Securities explained that although forced sales occurred due to a system error, the shareholder in question was already incurring losses, so it cannot compensate for all of those investment losses.
On an online community, a user claiming to be an affected victim said, "My loss of 15 million won was finalized due to the forced sale, but Kiwoom Securities says it will compensate 1.2 million won, calculated based on the stock's highest price and the quantity that was forcibly sold," expressing frustration by adding, "I didn't want to sell, but they say that's all the compensation will be."