Banker La Deok-yeon Aided, Detained After Refiling... Southern District Prosecutors' Office 'Second Chance'

Three Warrants Related to Finance and Securities Dismissed in September
Dismissal Trend Broken but... "Strengthened Proof Needed"

The Seoul Southern District Prosecutors' Office was able to breathe a sigh of relief after a banker who helped raise investments for the key figure La Deok-yeon Hoan and his associates in the 'SG Securities Stock Price Crash Incident' was arrested following a re-request for detention. Since financial and securities crimes are difficult to prove clearly during the investigation stage, stricter standards are applied for issuing arrest warrants, leading to calls for more thorough investigations.

According to the legal community on the 14th, Judge Yoo Hwan-woo, in charge of warrants at the Seoul Southern District Court, held a detention hearing the day before for Kim (age 50), head of the corporate finance team at Bank A, and issued an arrest warrant citing "risk of flight." Kim is suspected of violating the Capital Markets Act, the Act on the Regulation and Punishment of Criminal Proceeds Concealment, and bribery. He is accused of participating in the crimes of La and his associates, who are charged with market manipulation, by attracting investors and pocketing 250 million won. The prosecution had requested Kim's arrest warrant in June, but the court dismissed it, stating the need to guarantee his opportunity to defend himself. After three months of supplementary investigation, the prosecution secured Kim's custody, which is expected to accelerate the identification of La and his associates' investment solicitation methods.

Recently, arrest warrants related to financial and securities crime cases handled by the Seoul Southern District Prosecutors' Office, which have attracted public attention, have been repeatedly dismissed by the courts. On the 6th, arrest warrants for lawyer Cho (age 43) and accountant Choi (age 41), who advised La and participated in the crimes, were dismissed. Warrants for professional golfer Ahn Seong-hyun (age 42) and Lee Sang-jun, CEO of Bithumb Holdings (age 54), who were accused of requesting coin listings, were also dismissed, leading the prosecution to indict them without detention on the 8th. On the same day, arrest warrants for three key figures, including Jang Ha-won, CEO of Discovery Asset Management, central to the 'Discovery Incident,' were also dismissed.

The prosecution has so far shown indifference to the dismissal of warrants. After the dismissal of Jang's warrant, a prosecution official said, "From the outside, it may seem worrisome, but we do not particularly think so," adding, "There are cases where maintaining the prosecution is a concern even after a warrant is issued, while there are many cases where investigations proceed well and sentences are handed down even if the warrant is dismissed." However, there was also a sense of frustration within the prosecution over the repeated dismissals. One prosecution official expressed regret, saying, "I hope judgments are made based on objective evidence rather than being swayed by the suspect's excuses," and added, "While crimes like theft and violence are clear-cut, financial and corporate-related cases often involve many excuses from suspects, shifting of responsibility, and evidence tampering."

Amid opposition party attacks on the reinvestigation of the so-called 'three major funds' (Lime, Optimus, Discovery) and the repeated dismissal of arrest warrants that nearly cornered the prosecution, the arrest of Kim after a re-request is seen as an opportunity for a turnaround. A prosecution official said, "It is true that the likelihood of issuance is lower when a warrant is requested a second time, but we did our best by strengthening the grounds for detention and the charges compared to before."

[Image source=Yonhap News]

In the legal community, there are also criticisms that the standards for issuing arrest warrants in financial crimes are too high. Professor Lee Chang-hyun of the Graduate School of Law at Hankuk University of Foreign Studies said, "Because it is difficult to prove criminal charges in securities crimes, the warrant judge seems not to be confident even after the substantive hearing," adding, "In contrast to violent crimes like murder, where warrants are mostly issued if the suspect is certain, the difficulty in finding clear evidence in the early investigation stage of stock price manipulation charges is reflected in the dismissal of warrants." He further stated, "I believe that if the damage is significant and it is recognized that the suspect was deeply involved and gained large benefits, issuing a warrant is necessary." There are also opinions that the prosecution should use this case as an opportunity to more thoroughly prove charges during the investigation process. Professor Kwon Jae-yeol of Kyung Hee University Law School said, "Cases related to the Capital Markets Act tend to lack solid legal theories or precedents," and added, "The prosecution must effectively persuade the seriousness of the matter and present evidence that goes beyond reasonable doubt."

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