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Photo = Yonhap news |
[Alpha Biz= Kim Jisun] The Financial Services Commission (FSC) has imposed fines totaling 28.9 billion KRW and issued institutional warnings and cautions to nine securities firms involved in improper "bond rollovers" in wrap accounts and discretionary trusts, shifting client losses onto other investors.
At its third regular meeting, the FSC finalized penalties against Korea Investment & Securities, Mirae Asset Securities, NH Investment & Securities, KB Securities, Hana Securities, Kyobo Securities, SK Securities, Eugene Investment & Securities, and Yuanta Securities.
Eight firms received institutional warnings, while SK Securities was issued an institutional caution. Additionally, Kyobo Securities faced a one-month suspension of certain private fund operations.
According to a December 2023 report from the Financial Supervisory Service (FSS), these firms' asset managers manipulated bond transactions to artificially achieve target returns for maturing accounts, engaging in illegal cross-trading. Some firms even used proprietary assets to cover client losses. Certain firms bought corporate paper (CP) from client accounts at inflated prices to meet promised returns.
Regulators warned that any recurrence of such misconduct would result in stricter penalties in future deliberations.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
