[Infostock Daily=Reporter Park Jeong-do] The Financial Supervisory Service has notified the chief executive officers (CEO) of three securities firms that sold the fund in connection with the suspension of the redemption of the Lime Asset Management Fund, which lost 1.6 trillion won. The level of disciplinary action to be materialized in the future is expected to be the second highest level of suspension after the demand for dismissal. It is observed that it is not easy to maintain the position once the suspension of duty is confirmed.
The case of the Financial Supervisory Service imposing heavy penalties on securities firm CEO is hard to find except for the case of Tong Yang Securities in 2015 and Samsung Securities in 2018. For this reason, it is expected that administrative litigation will take place even after the sanctions decision.
According to the financial sector on the 7th, the Financial Supervisory Service sent a preliminary notice to Shinhan Investment Co., Daeshin Securities and KB Securities containing institutional sanctions and heavy punishment on executives related to the Lime crisis in the late afternoon of the previous day. Subject to individual sanctions are Kim Byung-chul, former president of Shinhan Financial Investment Corp., Park Jung-lim, president of KB Securities Co., and Na Jae-chul, former president of Daeshin Securities Co. (current chairman of the Korea Financial Investment Association).
The Financial Supervisory Service cited the reason for the disciplinary action as "unpreparation of internal control standards,"the same as the reason for disciplinary action given to Hana Bank and Woori Bank CEO during the overseas interest rate-linked Derivative Linked Fund (DLF) sanctions. They say that they could not detect the fact that the fund was insolvent in the process of selling products due to the lack of proper internal control standards and caused consumer damage. As CEO is responsible for preparing internal control under related regulations, CEO should also be held accountable.
Reporter Park Jeong-do newface0301@naver.com
