"Minus Oil Prices" and Kiwoom Securities System Failure, Affected Investors May File Lawsuit (Comprehensive)

[Asia Economy Reporter Oh Ju-yeon] As international crude oil prices plunged into negative territory for the first time in history, some securities firms' home trading services (HTS) failed to recognize these values, raising concerns about potential investor losses. Consequently, some futures investors are reportedly preparing to file lawsuits against Kiwoom Securities for failing to perform timely rollovers (monthly contract replacements).

According to the financial investment industry on the 21st, at 3:09 a.m. that day, the price of West Texas Intermediate (WTI) crude oil for May delivery dropped into negative territory, causing a trading halt on Kiwoom Securities' HTS for the related futures product, "Mini Crude Oil May contract." The HTS failed to recognize the negative oil price, resulting in a suspension of trading. As a result, investors holding long positions in crude oil futures through the HTS were forced into margin calls (cash calls) and compulsory liquidation. Some are reported to have suffered not only principal losses but also incurred debts.

Online securities forums have been flooded with complaints about this issue. One investor lamented, "Because the HTS couldn't recognize the negative price, trading stopped, forcing those holding oil to be liquidated at zero and face cash calls," adding, "Even now, many have not been able to close their positions, and as oil prices fall, their debts are only increasing." The investor further explained, "When the May contract hit -$37, even those who bought at $20 and waited now owe more in debt than the money they lost."

Another investor told Kiwoom Securities' customer center, "I tried to liquidate at -0.025 won after the price dropped into negative territory, but there was an error in the Kiwoom Securities Hero Moon Global chart, and automatic liquidation orders at the current price were not processed, so immediate sell orders were rejected," adding, "The minus key on the order window keyboard was completely disabled, so I couldn't even place a liquidation order."

Some investors are reportedly demanding compensation from Kiwoom Securities. They are raising their voices, stating, "This incident is 100% Kiwoom Securities' fault," and insisting that the company must take responsibility.

A securities industry official commented, "Negative oil prices are an extremely unusual situation, and the failure to recognize negative crude oil prices was a common issue experienced by most securities firms."

The Financial Supervisory Service has received reports and recovery plans from Kiwoom Securities and has begun verification procedures, while Kiwoom Securities is also assessing the scale of the damage.