Financial Supervisory Service Reports 149 Cases of Disclosure Obligation Violations Last Year... 129% Increase Compared to Previous Year
[Asia Economy Reporter Eunmo Koo] Last year, the number of enforcement actions taken by financial authorities for disclosure obligation violations more than doubled compared to the previous year.
The Financial Supervisory Service (FSS) announced on the 13th that it took a total of 149 enforcement actions last year for violations of disclosure obligations under the Capital Markets Act, an increase of 84 cases (129.2%) compared to the previous year. The FSS explained, "The increase in enforcement actions was due to strengthened monitoring activities for disclosure violations and the simplification of investigation procedures for minor disclosure violations."
By type of enforcement, monetary sanctions such as fines and penalties accounted for 64 cases, representing 43.0% of the total, while warnings and cautions accounted for 82 cases (55.0%).
Moderate sanctions were mainly imposed in cases with significant market impact, including fines (35 cases) and penalties under the Capital Markets Act (29 cases). Minor sanctions were applied in 82 cases, such as violations of regular report submission obligations by unlisted companies with minor market impact, resulting in warnings or cautions.
By type of disclosure, enforcement actions due to violations of regular disclosures such as business reports and major event reports (77 cases, 51.7%) accounted for a higher proportion than issuance disclosures such as securities registration statements (19 cases, 12.7%).
The total number of companies subject to enforcement was 103, with a similar proportion of listed companies (54) and unlisted companies (49). Among listed companies, most were on KOSDAQ (41 companies).
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The FSS will continue to strictly enforce serious disclosure violations that undermine the reliability of disclosures and will provide ongoing guidance on violation cases and precautions to prevent disclosure violations.
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