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Photo = Daol Investment & Securities |
[Alpha Biz= Paul Lee] The Financial Supervisory Service (FSS) has initiated a targeted inspection of Daol Investment & Securities in connection with its involvement in brokering controversial fixed-income wrap account and specified money trust products.
According to the investment banking industry on June 25, the FSS is conducting a special examination into Daol Investment & Securities. A company official stated, "We understand this inspection is part of a broader review of brokerage firms that were involved in transactions with firms previously implicated in wrap and trust rollover practices."
Earlier this year, the FSS requested relevant transaction data from brokerages that had dealings with asset managers involved in the so-called “wrap account rollover” schemes. This month, the regulator also conducted a similar inspection into BNK Investment & Securities.
Previously, nine domestic brokerages, including KB Securities, faced disciplinary action after it was revealed that they had managed wrap account and trust products in ways that unfairly shifted losses to certain client accounts to ensure gains for others.
The FSS's ongoing inspections aim to determine whether additional firms were complicit or negligent in facilitating these controversial investment practices.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
