Financial Supervisory Service to Hold Optimus Disciplinary Hearing for NH Securities and Hana Bank on 18th... Severe Sanctions Expected

[Image source=Yonhap News]

[Asia Economy Reporter Eunmo Koo] The Financial Supervisory Service (FSS) will hold a disciplinary committee meeting on the 18th regarding financial companies involved in the Optimus scandal.

According to financial authorities and the financial investment industry on the 1st, the FSS last week gave prior notice of disciplinary measures to NH Investment & Securities, the largest seller of the Optimus fund, the fund administrator Korea Securities Depository, and the custodian Hana Bank.

Considering that the FSS imposed severe disciplinary actions such as reprimands or suspension of duties on most current and former CEOs of securities firms that sold Lime funds last November, it is widely expected that severe disciplinary measures (recommendation for dismissal, suspension of duties, reprimand) were also notified to Young-chae Jung, CEO of NH Investment & Securities. If severe disciplinary actions are confirmed, future employment in the financial sector will be restricted.

NH Investment & Securities sold Optimus funds worth 432.7 billion KRW, accounting for 84% of the total suspended redemption amount. At the upcoming disciplinary committee, the FSS is expected to hold the company accountable for failing to properly screen the faulty fund and selling it extensively to investors. NH Investment & Securities insists that they themselves were victims deceived by Optimus's fraudulent activities.

Even if the FSS inspection department has notified severe disciplinary measures, the level of sanctions may be adjusted at the disciplinary committee stage, which includes external members. The disciplinary committee is conducted in a trial format where the subject of the sanctions appears and presents rebuttal opinions.

Korea Securities Depository and Hana Bank have been criticized for failing to properly manage and supervise the fund as the fund administrator and custodian, respectively. However, it is reported that Seong-gyu Ji, CEO of Hana Bank, was excluded from the sanctions considering his responsibility for the actions.

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