Financial Supervisory Service Requests Prosecutor Investigation into Hana Financial Investment CEO's Suspected Insider Trading... "No Involvement in Account"
[Asia Economy Reporters Ji Yeon-jin and Park Ji-hwan] The Financial Supervisory Service (FSS) has referred Lee Jin-guk, CEO of Hana Financial Investment, to the prosecution for investigation 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 alleged insider trading.
The FSS has been investigating whether CEO Lee violated Article 54 (Prohibition on Use of Insider Information) 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 charges related to insider trading but not to charges related to proprietary trading by executives and employees.
The FSS conveyed a request for explanation regarding the fact that CEO Lee used insider information for 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 relevant company's stock, and sells it before 24 hours have passed since the announcement.
In response, CEO Lee stated in a press release on the same day, "I sincerely apologize for the controversy," but explained, "Due to various meetings and events that I, as CEO of Hana Financial Investment, had to attend, I entrusted the account to an employee, and I was not involved in any trading related to the charges raised by the FSS."
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He added, "The account pointed out by the FSS is a 'securities account in the name of the CEO himself, reported to the company in accordance with laws and internal control regulations,'" and emphasized, "Considering my over 30 years of experience working at securities firms and my usual emphasis on the importance of compliance awareness, there is no reason for the CEO to use insider information for proprietary trading."
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