The Financial Supervisory Service commissioned the prosecution to investigate Lee Jin-guk, the head of Hana Financial Investment and the vice chairman of Hana Financial Group, for violating the Capital Market Act, such as prior trading. It is alleged that the company’s research center used undisclosed inside information to buy and sell stocks before publishing the report.
According to the financial authorities and the securities industry on the 2nd, the Financial Supervisory Service delivered a statement of prosecution to the company on the 29th of last month, including CEO Lee’s misconduct. Following a comprehensive inspection in October last year, the Financial Supervisory Service (FSS) violated Article 54 of the Capital Markets Act (prohibition of use of job-related information) and Article 63 of the Capital Markets Act (selling of financial investment products by executives and employees) through a sectoral inspection in December following a comprehensive inspection in October of last year. I have been investigating it on suspicion. It is reported that the Financial Supervisory Service has decided to apply only the charges of prior trade.
The Financial Supervisory Service noted that it was discovered that a large amount of KOSDAQ small-cap stocks were purchased from 2017-2019 in the transaction details of the private securities account opened under the name of Lee and the account of Manager A, who was the secretary of Lee. The Financial Supervisory Service is known to have captured the circumstances in which CEO Lee used internal information such as undisclosed analysis data and purchase opinions in the process of buying and selling stocks using the account. According to Article 54 of the Capital Markets Act, executives and employees of financial investment companies should not use information that they have learned on the job or information that has not been disclosed to the outside for the benefit of themselves or a third party without justifiable reasons. The average valuation balance of this representative account, which has become a problem, is about 200 million won, and the annual average return is around 10%.
In particular, there is controversy that CEO Lee’s securities account was managed by an employee who was not registered as a discretionary investment agent. Unless a contract is made with a person registered as a discretionary investment business under the Capital Market Act, such discretionary management is illegal. Representative Lee said, “It is a normal transaction that has not been filtered out of the current internal control system,” and said, “We will actively address the charges.”
Reporter Seol Ji-yeon [email protected]
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