Korea Investment & Securities involved in 800 billion won 'ghost bonds' accident
Korea Investment & Securities involved in 800 billion won 'ghost bonds' accident
  • Lee Jun-sung
  • 승인 2019.09.23 11:16
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FSS calls on Korea Investment & Securities to come up with anti-recurrence steps


Orders for bond sales, which are 1,000 times more than what they actually have, have been placed on the market. The Korea Exchange said on Sept. 18 that 30 billion won and 50 billion won worth of sales orders for JTBC corporate bonds came to the bond market at around 9 a.m. in the morning on Sept. 16 through the window of Korea Investment & Securities.

The amount of these orders for sales was 80 billion won, which is more than the total amount of corporate bonds issued (51 billion won.) 

Korea Investment & Securities said that the change in the computer system through the implementation of the electronic securities system was caused by the wrong setting by the developer to input 1,000 times the actual amount when receiving "other companies' replacement bonds."

The client reported the case to the company after seeing that the amount of JTBC corporate bonds increased to 20 billion won in the process of transferring 20 million won worth of JTBC corporate bonds to accounts at Korea Investment & Securities.

However, orders for selling 30 billion won and 50 billion won worth of bonds were issued from the two “other companies’ replacement bonds" accounts through the Home Trading System (HTS) before Korea Investment & Securities confirmed the issue and took action.

Other companies’ replacement bonds refer to the transfer of bonds held by customers to other brokerage accounts.

Although the volume of wrong-selling orders on the market did not lead to a deal, the time when the order was finally canceled from the exchange system was 10:25 a.m. and 28 a.m., respectively. If the company's transaction suspension measures were taken later due to the lack of a client's report, the deal would have been signed.

In response, the Financial Supervisory Service said on Sept. 19, “Korea Investment & Securities was involved in an error in the process of upgrading its bond-related system. We instructed the brokerage house to correct the errors and come up with measures to prevent a recurrence.”

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