The nation’s top financial regulator said on Wednesday that it would expand its regulatory manpower to crack down on stock manipulation practices.
“We will bolster the sector in charge of investigating unfair (stock) trading practices,” Financial Supervisory Service Governor Choi Soo-hyun said in a news briefing.
As an action to raise the probe’s efficacy, Choi, who took office on March 18, stressed that the FSS is considering “increasing the number of inspectors for stock scams in the brokerage industry” in consultation with the decision-making Financial Services Commission.
 |
Choi Soo-hyun |
He also said the FSS plans to establish a department to oversee irregular intra-group share trading in the conglomerate sector.
His remarks mean that the regulator is seeking to rigidly reprimand both stock manipulators and conglomerate-based financial firms, which engage in irregular deals with their manufacturing affiliates.
Despite a series of disciplinary actions against fraudulent stock traders, FSS data showed that manipulation or irregular insider trading cases have been rampant in the local market.
According to some news reports, the prosecution is considering providing the FSS with the judicial police power, which may enable financial authorities to directly investigate alleged stock manipulators.
Currently, the regulator only has the right to ask the prosecution to investigate suspected cases.
The FSS, however, said it has not been notified of the new authority from the prosecution.
Meanwhile, market insiders say the FSS governor’s remarks reflect the Park Geun-hye administration’s commitment to eradicating unfair stock trading.
At a Cabinet meeting earlier this month, President Park reiterated that the government will not sit idly by irregularities on the stock market, which victimize retail investors.
Gov. Choi went on to say that the regulator will strengthen oversight of the insurance sector, pointing out that consumers’ petitions against insurance companies account for the majority of the total petitions filed with the FSS.
“We will seek a variety of methods to curb the growing disputes (between consumers and insurers),” he said.
Choi is also pushing forward his policy to introduce the consumer-initiated investigations system, under which consumers will be able to call for the FSS to conduct probes into financial firms such as commercial banks and credit card issuers.
To map out details for the system, an independent board comprising outside experts and regulatory officials will likely be forged in the coming months.
He also promised to enhance efforts to provide financial support to the low-income bracket that are more vulnerable and exposed to potential credit default.
By Kim Yon-se (
kys@heraldcorp.com)
