[Column] Is a Prosecutor-Origin Director Just More of the Same?

Sun Seon-hee, Securities Capital Market Department Reporter

The move of a special investigation chief prosecutor to the Financial Supervisory Service (FSS) was an unprecedented step. It was the first case since the establishment of the FSS that a former prosecutor took the position of its governor. This refers to Lee Bok-hyun, the FSS governor. President Yoon Suk-yeol pushed through the appointment in June last year, early in his administration, despite the political burden of it being a 'close aide appointment,' likely because of the trust in 'Prosecutor Lee Bok-hyun,' who showed outstanding achievements in economic and financial investigations during his tenure.

Opinions were divided, but public expectations were no different. Past FSS governors under previous administrations often lacked presence or were embroiled in scandals such as hiring irregularities or overseas business trips, leading to disgraceful resignations. The opposition repeatedly criticized Governor Lee as a 'close aide appointment,' but the public had considerable expectations about what the so-called 'elite prosecutor' would accomplish at the FSS.

Moreover, Governor Lee is a rare case in the legal community as a graduate in economics. During his time as a prosecutor, he handled major cases such as the Lone Star case (2006), the Hanwha Group slush fund case (2010), and unfair labor practice cases including Samsung Group's union-busting operations (2017). Notably, during the last regime change, he joined the investigation team for the so-called 'Choi Soon-sil political scandal,' thoroughly examining illegal succession processes and securing the detention of Samsung Electronics Chairman Lee Jae-yong, achieving results in the challenging field of economic and financial investigations. When he retired in April last year, he criticized the 'complete dismantling of prosecution powers' (검수완박) in a post within the prosecution, quoting economist Keynes, as if foreseeing his own path as a financial regulator.

However, after the highly publicized stock price manipulation scandal, his presence has become faint. Memories of 'Prosecutor Lee Bok-hyun,' who cracked down on economic criminals, have grown dim, while photos of him on overseas trips with supervised companies have circulated more widely. In the securities industry, there is puzzlement over why the FSS governor took a position that would have been more appropriate for the Financial Services Commission chairman. When this was pointed out at the National Assembly's Political Affairs Committee, the ruling party was quick to defend Governor Lee. This is not much different from past FSS governors with political backgrounds. Many people feel frustrated by the financial authorities' failure to detect stock price manipulation over several years and the continued vulnerability of South Korea's capital market to financial crimes.

Governor Lee is about to mark his first anniversary in office. Coincidentally, as the general election season approaches, political circles in Yeouido are concretely envisioning 'Politician Lee Bok-hyun.' Whether he will actually run is unknown, but the mere persistence of such rumors is unwelcome in the eyes of the public. What will the achievements of the 'first-ever prosecutor-origin FSS governor' be remembered for? There is concern that only the dazzling title will remain.

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