After Ikbokhyun's Appointment, Prosecutorial Cooperation Increases Fivefold... War Against Unfair Trade

1 Year in Office: 25 Cases Referred to Prosecution
Case Handling Doubled to 136
Cooperation in SG-Related Stock Plunge Incident Too

"I will carry a sense of responsibility as if staking my position and promote the strict crackdown on unfair trade as a key policy agenda."

On the 7th, marking the first anniversary of his inauguration, Lee Bok-hyun, Governor of the Financial Supervisory Service (FSS), declared war against market-disturbing forces such as stock price manipulation. He apologized to the public for not responding proactively to the recent 'Soci?t? G?n?rale (SG) Securities-triggered stock price crash incident' and expressed his determination to reorganize the organization and eradicate stock price manipulation forces.

Lee Bok-hyun, Governor of the Financial Supervisory Service, is speaking at a joint discussion forum of related organizations to eradicate unfair trading held at the Korea Exchange in Yeouido, Seoul on the 23rd. Photo by Hyunmin Kim kimhyun81@

The legal community interprets Governor Lee’s remarks as a sign of confidence. Over the past year, he has strengthened cooperation with the prosecution, his ‘home base,’ to handle financial cases. From June last year to May this year, the FSS referred 25 financial cases to the prosecution via the fast track. This year alone, seven cases have been sent to the prosecution. Compared to fewer than five cases transferred through the fast track in the year before his inauguration?from June 2021 to May last year?the number has increased fivefold in one year. The fast track is a procedure where, if the Financial Services Commission (FSC) or the FSS investigates an unfair trade case and judges that the matter is serious or requires urgent handling, the Securities and Futures Commission under the FSC can skip the review and resolution process and immediately refer the case to the prosecution.

The total number of unfair trade cases handled since Governor Lee’s inauguration has also more than doubled. The number of unfair trade cases processed increased from 67 cases between June 2021 and May last year to 136 cases in the year following his inauguration. About one-fifth of these were referred to the prosecution via the fast track. Representative cases include the Edison EV (now Smart Solutions) Ssangyong Motor ‘eat-and-run’ case, the insider trading allegations involving current and former executives of EcoPro, a leading secondary battery company, and the Kakao’s stock price manipulation allegations during SM Entertainment’s public stock buyback process.

Governor Lee is also cooperating with the prosecution on the SG Securities-triggered stock price crash incident. On April 28, the FSS formed a joint investigation team with the Seoul Southern District Prosecutors’ Office’s Financial Securities Crime Joint Investigation Unit and the FSC to investigate the case.

Lee, a graduate of Seoul National University’s Department of Economics, also holds a certified public accountant license. During his time as a prosecutor, he was recognized for this expertise and was mainly assigned to financial and tax investigations. He handled major corporate investigations including the Hyundai Motor slush fund case, as well as cases involving Hanwha, Taekwang, and Lone Star. While serving as head of the Economic Crime Division at the Seoul Central District Prosecutors’ Office, he investigated the Samsung Biologics accounting fraud case and even appeared in court to maintain the prosecution after indictment. During the ‘Choi Soon-sil political scandal special prosecution,’ he was in charge of investigating Lee Jae-yong, then Vice Chairman of Samsung Electronics, regarding the merger between Samsung C&T and Cheil Industries.

As Governor Lee emphasized strict punishment for unfair trade cases along with cooperation with the prosecution, the number of fast track cases is expected to continue increasing. To this end, the FSS announced on the 30th of last month a ‘Plan to Strengthen Unfair Trade Investigation Capabilities,’ establishing a special investigation team, an information collection task force, and a digital investigation response team, increasing personnel in the three investigative departments from 70 to 95. The digital investigation response team is responsible for investigating new digital assets such as virtual assets and Security Token Offerings (STO). Starting this month, the FSS will operate an ‘Investigation Information Sharing System’ with the FSC and Korea Exchange.

In response to the FSS’s proactive moves, the prosecution’s pace has also quickened. In addition to the Seoul Central and Seoul Southern District Prosecutors’ Offices, many prosecutors’ offices nationwide are investigating numerous unfair trade financial cases. It is reported that the prosecution has decided to postpone the usual mid-year personnel reshuffle for senior prosecutors, typically conducted between June and August, and will not hold regular personnel changes for the time being. This decision reflects the judgment that ongoing investigations, including the Daejang-dong urban development preferential treatment and lobbying case, the 5 billion won club, the Democratic Party’s money envelope case, and unfair trade cases, must be focused on and concluded promptly.

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