Park Jeong-rim, Yang Hong-seok, Jung Young-chae Representative Award
When a punishment of more than a censure warning is confirmed
Restriction on employment in the financial sector for consecutive terms and 3 to 5 years
Financial authorities are resuming sanctions procedures against the CEOs of fund sellers in connection with the Lime/Optimus fund crisis, which resulted in large-scale redemption suspensions. Park Jeong-lim, CEO of KB Securities, Yang Hong-seok, president of Daishin Securities (currently vice chairman), and Chung Young-chae, CEO of NH Investment & Securities are the targets.
The Financial Services Commission announced on the 18th that it will resume deliberations on violations of the obligation to prepare internal control standards among financial companies that sell private equity funds insolvent from next month.
Previously, the Financial Supervisory Service held a sanctions review committee in November 2020 and decided to punish and warn CEO Park and Vice Chairman Yang for violating the obligation to prepare internal control standards in relation to the Lime Fund incident (violation of the Governance Act of financial companies). In March of last year, it was decided to issue a reprimand warning to CEO Jeong for violating the obligation to prepare internal control standards related to the sale of the Optimus Fund. The sanctions plan decided by the Financial Supervisory Service Sanctions Deliberation Committee is finalized at a regular meeting after prior review and coordination by the Financial Services Commission’s agenda subcommittee, which was delayed due to legal review as a result of trials in similar cases. If the financial authorities confirm sanctions beyond a censure warning at a regular meeting, employment in the financial sector will be restricted for three to five years with consecutive terms.
The reason why the Financial Services Commission resumed the sanctions process is because it believes that legal uncertainty related to the laws and regulations underlying the sanctions has been resolved with a recent Supreme Court precedent. Earlier, on the 15th of last month, the Supreme Court upheld the lower court ruling that Woori Financial Group Chairman Sohn Tae-seung revoked the Financial Supervisory Service’s warning and disciplinary action in an administrative lawsuit filed by the financial authorities to revoke the heavy disciplinary action he received from the financial authorities in connection with the loss of overseas interest rate-linked derivatives-linked funds (DLF). . As a result, although the financial authorities lost the case, it is judged that with this ruling, the legality of the sanctions standard was recognized as a Supreme Court precedent.
Some observers say that the prosecution’s recent re-investigation of the Optimus Fund fraud case and the resumption of sanctions procedures against CEOs in the financial sector mean a comprehensive investigation into the large-scale private equity fund crisis that occurred under the previous administration.
Reporter Song Soo-yeon