The Financial Supervisory Service said Thursday that it issued a “caution” against Shinhan Investment Corp. for breaching the law on transactions based on real-name accounts.
The securities unit of Shinhan Financial Group has been placed under regulators’ investigation over the past few months market allegations that former group chairman Ra Eung-chan traded group stocks via the Shinhan Investment accounts under borrowed names.
An ex-branch manager of Shinhan Investment was found to have endorsed the applications to open accounts from seven Korean-Japanese without verifying their identification. The applications were requested by a group employee, according to the FSS.
Further, nine employees of the brokerage firm failed to secure records after trading stocks worth 17.6 billion won ($16 million) via accounts under borrowed names for the past several years.
While some market insiders continued to speculate that the dubious accounts were controlled by ex-group chief Ra, the financial regulator has not included him in its regulatory sanction list.
An FSS official hinted that additional revelations could be forthcoming, saying that the prosecution is also investigating the scandal involving Ra.
Instead, the regulator has decided to take disciplinary measures against 12 executives or employees and imposed the securities firm fines of 25 million won.
Meanwhile, 27 employees of Kyobo Securities were also reprimanded for violating the law on financial investment.
By Kim Yon-se (
kys@heraldcorp.com)
