Lee Bok-hyun, Financial Supervisory Service Chief: "Investigate SG-Triggered Crash Regardless of Status"

▲ Lee Bok-hyun, Governor of the Financial Supervisory Service [Image source=Yonhap News]

Lee Bok-hyun, Governor of the Financial Supervisory Service (FSS), stated on the 28th that he will "swiftly and strictly investigate regardless of rank, wealth, or social status" regarding the stock price manipulation suspicions triggered by the sell-off bomb incident originating from Soci?t? G?n?rale (SG).

On the same day, Governor Lee expressed this position at the 'Ministry of Employment and Labor and Financial Supervisory Service Retirement Pension Operators On-site Visit Meeting' held at the Mirae Asset Securities headquarters in Jung-gu, Seoul.

At a press meeting immediately after the conference, when asked whether there are plans to investigate securities company owners involved in stock price manipulation related to this incident, he responded, "Strict response to unfair trading is a fundamental element in securing trust for market expansion."

Previously, Kim Ik-rae, Chairman of the Daou Kiwoom Group, was suspected of being involved in stock price manipulation after disposing of his shares in Daou Data just before the crash.

Governor Lee said, "In a situation where market volatility has increased, we have long been paying close attention to forces that create and spread fake news or excessively suggest directions through platforms like YouTube," adding, "Financial authorities including the Financial Services Commission, FSS, prosecution, and investigative agencies have cooperated with much stronger intensity and determination through various investigations and fast-track procedures."

He also stated that they will improve the shortcomings of Contracts for Difference (CFD), which were pointed out as a cause of this crash incident.

However, Governor Lee explained, "Just because there is a rise or fall in certain stocks, we cannot treat all stocks as potential criminals," and added, "The FSS is a policy institution, not an investigative agency, and while strictly establishing monitoring systems, it cannot view everything from the perspective of lawbreakers or illegality."

He continued, "Since last year, we have reviewed the shortcomings of various systems including CFDs, and after issuing administrative guidance on margin ratios since 2021, we have been working on reviewing amendments to supervisory regulations."

He also mentioned, "We are aware of concerns that CFDs might replace short selling, but these concerns have not materialized, and we have been steadily monitoring transparency in disclosures and information since the end of last year."

Regarding criticism that CFDs are in a regulatory 'blind spot,' he emphasized, "It is true that securities companies have engaged in overheated competition by strong marketing or providing incentives," and added, "While financial authorities can control and manage this, there is also an aspect where individual securities companies or the market need to exercise restraint."

This content was produced with the assistance of AI translation services.