 |
Kiwoom Securities logo. (Photo: Kiwoom Securities) |
[Alpha Biz= Paul Lee] Kiwoom Securities has completed compensation procedures for over 18,000 investor complaints filed due to a system error in April that disrupted trade executions.
According to materials obtained by Rep. Kim Sang-hoon of the National Assembly’s Political Affairs Committee from the Financial Supervisory Service (FSS), a total of 18,305 complaints were submitted through Kiwoom’s customer service channels following the incident. All compensation has now been settled in accordance with internal guidelines.
Kiwoom plans to cover the compensation costs through its electronic financial transaction liability insurance policy, which provides coverage up to KRW 3 billion.
Separately, financial regulators completed an on-site inspection of Kiwoom in mid-May and are currently reviewing potential sanctions. The FSS determined that the system experienced an abnormal surge in order modification and cancellation requests, which led to delays in the order matching system.
Regulators are reviewing whether Kiwoom violated Article 21 of the Electronic Financial Transactions Act, which obligates financial firms to maintain the safety and reliability of their electronic systems using due diligence and compliance with the Financial Services Commission’s technical standards.
The system malfunction occurred on April 3 and 4, during which Kiwoom’s MTS and HTS trading platforms experienced multiple outages. On April 3, the issue began at 9:02 a.m. and lasted until 9:59 a.m. On April 4, further disruptions occurred in three separate intervals, totaling over 4.5 hours of system failure.
Investor complaints were accepted through April 11, as the outages coincided with heightened market volatility driven by U.S. tariff shocks and the Constitutional Court’s ruling on former President Yoon Suk-yeol's impeachment case, exacerbating trading losses.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
