Financial Supervisory Service Reports Lee Jin-guk, Hana Financial Investment CEO to Prosecutors for Insider Trading Allegations

Published 03 Feb.2021 07:27(KST)

[Image source=Yonhap News]

[Asia Economy Reporter Park Jihwan] The Financial Supervisory Service (FSS) has requested a prosecution investigation into Lee Jin-guk, CEO of Hana Financial Investment, on charges of insider trading and violations of the Capital Markets Act.

According to financial authorities and the financial investment industry on the 3rd, the FSS recently delivered an inspection opinion letter to Hana Financial Investment regarding CEO Lee's insider trading allegations.

The FSS has been investigating whether CEO Lee violated Article 54 (Prohibition on Use of Information Related to Duties) and Article 63 (Trading of Financial Investment Products by Executives and Employees) of the Capital Markets Act during comprehensive and sectoral inspections of Hana Financial Investment conducted in October and December of last year. It is known that the FSS decided to apply the insider trading charges but not the self-trading charges against executives and employees.

The FSS conveyed to CEO Lee a request to explain the fact that he used information related to his duties to conduct insider trading. Insider trading refers to buying and selling stocks before the distribution of corporate analysis reports. According to Article 54 of the Capital Markets Act, securities firm executives and employees are prohibited from using information obtained through their duties or undisclosed information for their own or third parties' benefit without justifiable reasons. A typical example of insider trading is when a securities firm researcher views a report in advance, purchases the company's stock, and sells it within 24 hours after the announcement.