(Bloomberg) -- It was supposed to be the deal that vaulted Mirae Asset Securities Co. into the global big leagues.
Most Read from Bloomberg
Trump's U-Turn on Iran Sanctions Would Unravel Decades of Curbs - Yen Hits Four-Decade Low in Historic Slide That's Rattled Japan - US Stocks Get Tech Boost After AI-Fueled Selloff: Markets Wrap - Prabowo Risks Prompt Global Banks to Pull Cash Out of Indonesia
But SpaceX's record-breaking initial public offering has instead forced South Korea's biggest brokerage to apologize to its clients and have its practices inspected by local regulators.
The episode, which left Mirae as the only one of 23 underwriters to receive no stock allocation in SpaceX's IPO, underscores how even the most mundane communication snafus can have big consequences for financiers working on multibillion-dollar deals.
At the heart of the issue was a misunderstanding over how orders were supposed to be submitted for SpaceX's offering, according to people familiar with the situation, who asked not to be identified discussing previously unreported details about a private matter.
The brokerage inadvertently treated an early request to indicate investor interest as the point at which it had submitted binding orders, the people said. As a result, more than $1.1 billion worth of Korean demand was never entered into the IPO order book, they said.
The apparent misunderstanding — the most consequential in what the people described as a series of miscommunications between Mirae and the lead managers — came during a step in the IPO process known internally as "Project Apex." In mid-May, weeks before bookbuilding began, the bookrunners circulated an email asking underwriters to indicate investor demand, which was aggregated in a virtual data room in line with standard practice for large deals.
Mirae responded to that request believing it had placed its clients' orders, according to some of the people, who are familiar with the firm's thinking. But from the perspective of the Wall Street banks running the deal, those responses were only indications of interest, not bids. The actual orders were entered in June after a separate email from the bookrunners, as is customary for such IPOs.
In other words, the New York-based banks viewed Mirae as having submitted zero retail orders, and ultimately allocated it zero retail shares, according to the people.
The miscommunication has emerged as one of the few blemishes on an otherwise successful deal. The $86 billion offering, the biggest in history, has won praise from investors for proceeding smoothly despite its complexity and compressed timeline.