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Photo = Shinhan Investment Corp. |
[Alpha Biz= Paul Lee] SEOUL, South Korea – October 23, 2025 – Two employees at Shinhan Investment Corp. who caused a loss of approximately ₩130 billion through exchange-traded fund (ETF) futures trading and attempted to conceal it have received reduced prison sentences on appeal.
The Seoul Southern District Court’s Criminal Appellate Division 3-2 (Presiding Judges Cho Kyu-seol, Yoo Hwan-woo, and Lim Sun-ji) revised the lower court’s ruling, sentencing both Cho, an ETF liquidity provider (LP) desk employee, and Lee, his department head, to two years and six months in prison, down from the original three-year terms handed down in the first trial.
According to the court, the defendants incurred massive losses while purchasing ETF futures during a market downturn, then falsified trading records to make it appear as if they had generated a ₩130 billion profit from swap transactions. The two also manipulated internal accounting records to inflate performance-based bonuses, receiving ₩137 million and ₩341 million respectively in unearned compensation.
The court acknowledged that the defendants partially compensated for the damages, but emphasized that “the victims suffered tangible and intangible losses, and the extent of restitution cannot be heavily weighted in sentencing.”
This case has drawn industry-wide attention for exposing internal control weaknesses and risk management failures within Korea’s major securities firms’ ETF trading desks.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
