The Financial Supervisory Service(FSS) has decided to report 21 Samsung Securities’ employees to the prosecution on charges of embezzlement and breach of duty. 

The employees are accused of selling overpaid shares despite their knowledge of an incorrect dividend payment. 

The financial watchdog announced Tuesday the results of its inspection into the securities firm’s mistaken payment of dividends in early April. 

The FSS will also report to the Fair Trade Commission allegations that the brokerage gave a monopoly of computer network contracts to Samsung SDS, an IT affiliate of its parent company Samsung Group. 

The FSS concluded that the incident was mainly caused by a deficiency of internal controls in the company’s dividend management system. 

The system was found to have structural problems, such as handling both cash and stock dividends on the same screen and a failure to warn against unusual, erroneous transactions. 

Samsung Securities mistakenly paid out millions of shares to its employees as stock dividends early last month. 

Under an employee stock ownership plan, the company had originally planned to pay dividends of one thousand won per share to its employees. But dividends of one thousand shares were mistakenly paid out after a worker processed the wrong figure. 

As a result, over two-point-eight billion shares were incorrectly paid as dividends worth nearly 112-point-seven trillion won. 

Some five million shares were sold by employees before the error was fixed.