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Regarding the situation of Lime Asset Management, where the repayment of KRW 1,669.7 billion was suspended, severe disciplinary sanctions, such as suspension of duties, were issued to former and current managing directors of securities firms. If sanctions are finalized by the Jeungsun Committee and the Financial Services Commission, there will be a full-scale legal battle in the financial sector.
On 10 September at 11.00 pm, the deliberation committee on sanctions of the financial supervisory service issued a final proposal for sanctions. Jae-cheol Na, former CEO of Daishin Securities (currently President of the Financial Investment Association), Hyung-jin Kim, former CEO of Shinhan Financial Investment, and former KB Securities CEO Yoon Kyung-eun, have decided to “ suspend their works ” as previously notified.
Among the sanctions, KB Securities Park CEO Jung-lim, the only current brokerage CEO, received a “notice of lawsuit”, while KB Securities CEO Kim Sung-hyun and former CEO of Shinhan Financial Investment Kim Byeong-cheol received a “cautionary warning”. The disciplinary level of KB Securities representatives Park and Kim was lowered one step from the start. Rep. Park received a “cautionary warning” from the “suspension of work”, which was notified in advance, and CEO Kim received a “cautionary warning” from “calendar notice”.
The sanctions against the executives of the financial companies are divided into five phases, such as: ▲ recommendation of dismissal (limitation of the appointment of executives 5 years) ▲ suspension of work (4 years) ▲ censorship notice (3 years) ▲ precautionary notice ▲ caution , etc. .
In order for the sanctions to be finalized, it is necessary to go through regular meetings with the Securities and Futures Committee of the Financial Services Commission and the Financial Services Commission. There is also the possibility that the level of penalties will be lowered after passing the procedures of the increase commission and the finance commission.
Some expect the lawsuit against the CEO disciplinary action of the Derivative-Combined Fund (DLF) situation to be reopened earlier this year. The president of the Woori Financial Group, Son Tae-seung, and the vice-president of the Hana financial group, Ham Young-ju, have filed an administrative suit and a request for a temporary injunction for the suspension of the effects in opposition to the disciplinary proposal, and is in there was a legal battle. After the banking sector, legal battles became inevitable in the securities sector.
The securities sector is in the position where the legal basis for this disciplinary proposal is insufficient. This is because the amendment to the Corporate Governance Act, which allows the CEO to be sanctioned in the event of lack of “internal control” by a brokerage firm, has not yet passed to the National Assembly.
A Shinhan Investment Corp. official said, “As the sanctions committee’s findings have not been finalized, we will focus as much as possible on the vocation in question.”
A securities industry official said, “I take a lot of the sanctions results” and said, “I am able to continue watching the results of the Jeungsun Committee and the Financial Services Commission in the future (until the final decision of the disciplinary proposal).
Financial Justice Solidarity welcomed the findings of the FSS sanctions committee, but said accountability should not be shifted to finance companies alone. There is also the responsibility of the financial supervisor.
A Financial Justice Association official said, “One of the rationale sellers argue is that the legal basis for sanctioning the CEO without revision of the Governance Act is that the legal basis is insufficient. But rather, the sanctions should be accepted to clarify. the revision of the law “. She said.
Meanwhile, the Financial Investment Association said that although President Na Jae-cheol was severely disciplined in the FSS sanctions deliberation, he could continue his work because he did not fall under the applicable financial institutions (securities companies).
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