SEOUL, Nov. 12 (Yonhap) — South Korea’s financial regulator on Friday ordered three brokerages to suspend parts of operations or pay fines for their involvement in a major financial fraud scandal involving a now-defunct hedge fund.
Once the nation’s biggest hedge fund, Lime Asset Investment has been accused of selling and running fraudulent financial products and subsequently freezing fund redemption estimated at around 1.6 trillion won (US$1.4 billion) in 2019.
In connection with the fiasco, Shinhan Investment Corp., KB Securities Co. and Daishin Securities Co. have been under probe for using fabricated information and other illicit methods to solicit customer purchases of Lime products.
The Financial Services Commission (FSC) said that it has ordered Shinhan Investment and KB Securities to suspend parts of their operations for six months and Daishin Securities to close a branch.
Shinhan Investment and KB Securities were fined 1.8 billion won and 609 million won, respectively, according to the FSC.
The fraud scandal has roiled the nation since last year and developed into a high-profile lobbying scandal, in which former and incumbent government officials and politicians are implicated.
Early this year, a Seoul court handed down the 15-year prison term to the hedge fund’s former vice president, along with a fine of 4 billion won. The court found him guilty of deceiving investors by concealing the massive loss from the company’s fraudulent fund product.
Source: Yohnap News Agency