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The financial oversight service held a sanctions review committee in connection with the suspension of redemption of the private equity fund Lime Asset Management and issued a censorship notice to the former managing directors (CEO) of the selling securities firm or severely punished for suspension of work. Since CEOs who have received more than severe disciplinary punishment in the future will be restricted from employment in the financial sector, if the disciplinary action is upheld, the parties risk going to trial. The responsibility of the financial supervision service for poor supervision is also growing.
According to the financial investment industry on the 11th, the financial supervision service was sanctioned by Hyung-jin Kim and Byung-cheol Kim, former CEO of Shinhan Financial Investment, and Jung-lim Park, former CEO of KB Securities, former CEO Yoon Kyung-eun, former CEO of KB Securities and Jae-cheol Na, former president of Daishin Securities (currently president of the Financial Association). Determined the water level.
CEO Park Jung-rim was warned of censorship and former CEO Yoon Gyeong-eun, former CEO Kim Hyung-jin and former CEO Na Jae-cheol were suspended. The financial supervision service notified these four people in advance of the suspension of their duties, but only the Park representative was cut one step. Since they are the only ones among them in office, taking into account the management situation, etc., the suspension of work can be interpreted as a burden. Former CEO Kim Byeong-cheol received a reprimand which was reduced to one level.
However, due to CEO Park Jeong-rim’s strict disciplinary action, which was ahead of his New Year’s end later this year, his retirement has become uncertain. Furthermore, when the final sentence is established, the hiring of executives of financial institutions is limited for at least three years.
Na Jae-cheol, head of the Gold Fighting Association, is also burdened with severe punishment. Chairman Na was fined for incompletely selling Lime Funds while serving as CEO of Daishin Securities. The Gold Investment Association is a financial institution, so it is not a financial institution subject to severe disciplinary action, but because it represents the gold investment industry, it cannot escape the theory of liability.
In this regard, an official of the Kumtus Cooperative said: “We have received confirmation from the Financial Supervisory Service that it does not mean giving up working as director of the Kumtus Association”. “We will finish our mandate by December 2022”.
Previously, some 30 securities industry CEOs have filed petitions stating that the FSS is highly disciplined, but it is interpreted that the FSS had no choice but to adhere to the principles as it would have to continue sanctions against banks in the future.
However, the final sanctions proposal by the FSS Sanctions Review Committee is not final. In order for this to be finalized, it must go through regular meetings with the Securities and Futures Committee of the Financial Services Commission and the Financial Services Commission. It is noted that the level of penalties for companies and executives can be lowered through the FSC procedure.
When the final sanction proposal comes out, there is a high possibility that those subject to sanctions, such as KB Securities, will take legal proceedings such as an administrative suit to overrule the disciplinary action and a request for a temporary disposition to suspend the effect. Earlier this year, Woori Financial President Son Tae-seung and Hana Financial Vice President Ham Young-ju, who received severe disciplinary action from the Financial Supervision Service for the DLF rate incident. of foreign interest, have filed an application for a temporary injunction to suspend the effectiveness of the disciplinary action after confirmation of the disciplinary action. .
Furthermore, the securities industry is raising its voice on supervisory responsibility. The reason is that the preventive oversight of the FSS has failed in connection with the suspension of the chain repayment of private equity funds, and former and current employees of the FSS, including alleged lobbying, are being investigated for being involved in illegal activities .
Financial Justice Solidarity and others have decided to request a public interest audit from the financial oversight service, saying, “We shouldn’t take responsibility for the unsupervised and only discipline the seller.”
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