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Meritz Securities office building. (Photo=Meritz Securities) |
[Alpha Biz= Reporter Kim Jisun] Meritz Securities has come under scrutiny for allegedly securing 300 million won in improper profits, only to pay a fine that is less than a third of that amount.
According to the Kukmin Ilbo, a report submitted by the Financial Supervisory Service to Representative Kim Sang-hoon of the ruling People Power Party revealed that Meritz Securities was found to have improperly earned 300 million won through a "balance acquisition contract" with Asset Management Company A and was subsequently fined 93 million won.
The firm reportedly made these profits after investing in a private equity fund that required no additional funding, collecting the fees in two transactions. The private equity fund, which was at risk of being terminated by a single investor, was saved when an institutional investor expressed interest, eliminating the need for further investments. Despite this, Meritz Securities leveraged its position as the fund distributor to collect fees.
In the past year, there were eight identified cases of irregular business practices among domestic securities firms, with Meritz Securities being involved in six of those. IBK Investment & Securities and Korea Investment & Securities were implicated in one case each. The total fines issued to these three firms for these violations amounted to 2.735 billion won. In the current year, five cases have been reported, leading to fines of 285 million won.
Representative Kim stated, “The prevailing mindset that one can simply pay fines for repeated illegal activities is a significant factor undermining public trust in financial authorities.”
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
