[News Terms] 'Teuksagyeong' Shows Presence Through Kakao Investigation

The 'Capital Market Special Judicial Police (Special Judicial Police)' are special judicial police officers affiliated with the Financial Services Commission and the Financial Supervisory Service. Special judicial police officers are commonly abbreviated as 'Teuksagyeong' and are judicial police with investigative authority limited to specific matters.

Teuksagyeong were introduced in 1956 with the enactment of the "Act on the Duties and Scope of Judicial Police Officers," granting investigative authority to administrative officials for investigations in specialized areas such as food, health, and safety accidents.

Kim Beom-su, former chairman of Kakao, is appearing at the Financial Supervisory Service on the 23rd to be investigated regarding allegations of stock price manipulation related to the acquisition of SM Entertainment. Photo by Kang Jin-hyung aymsdream@

However, the Financial Services Commission and the Financial Supervisory Service introduced Teuksagyeong only a little over four years ago. In 2008, with the inauguration of the Lee Myung-bak administration, the Financial Supervisory Commission was reorganized into the Financial Services Commission, and the Financial Supervisory Service became a supervisory agency under the Financial Services Commission. In June of that year, the Act on the Duties and Scope of Judicial Police Officers was amended to allow officials of the Financial Services Commission to serve as Teuksagyeong.

However, the Teuksagyeong were not actually activated, and when financial crime investigations occurred, Financial Supervisory Service employees were dispatched to assist the prosecution (Seoul Southern District Prosecutors' Office). As financial crises occurred and crimes became rampant in capital markets such as finance, insurance, and securities, discussions on introducing Teuksagyeong intensified. Traditional investigative agencies like the police or prosecution could not conduct proper investigations due to the technical complexity of finance and lack of information.

Accordingly, in August 2015, the Financial Supervisory Service amended the Act on the Duties and Scope of Judicial Police Officers to enable the operation of Teuksagyeong, but the launch of Teuksagyeong was again blocked. Since the Financial Supervisory Service is a public enterprise, not a government organization, its employees are not public officials, and there was controversy over whether it was appropriate to assign the role of Teuksagyeong to them. Ultimately, it was only in July 2019, four years later, that the Teuksagyeong organization was launched within the Financial Supervisory Service.

Two years later, in March 2022, Teuksagyeong began activities within the Financial Services Commission as well, and the Financial Supervisory Service's Teuksagyeong expanded in size. With the number of Teuksagyeong increasing from 7 at the Financial Services Commission and 10 at the Financial Supervisory Service to 15, capital market Teuksagyeong activities entered a full-fledged phase.

Capital market Teuksagyeong investigate cases reported or notified to the prosecution by the Securities and Futures Commission (SFC) under the Financial Services Commission, cases urgently or seriously deemed by the SFC chairman and fast-tracked to the prosecution, cases recognized as needing investigation conversion through the 'Capital Market Teuksagyeong Investigation Deliberation Committee,' and cases independently identified by Teuksagyeong. To prevent unwarranted investigation initiation, investigations must undergo deliberation by the Investigation Deliberation Committee before commencement. Capital market Teuksagyeong can, under prosecution guidance, conduct communication detail inquiries, apply for arrest warrants, and carry out searches and seizures.

According to the capital market industry on the 25th, the Financial Supervisory Service's capital market Teuksagyeong has gained recognition four years after its launch by actively investigating allegations of market manipulation involving Kakao. Following the detention of Bae Jae-hyun, Kakao's Chief Investment Officer, Teuksagyeong publicly summoned Kim Beom-su, Kakao's founder, on the 23rd. This led to the installation of a photo line at the Financial Supervisory Service for the first time since the launch of Teuksagyeong.

As the investigation by Teuksagyeong accelerates, there is a growing atmosphere suggesting the possibility of applying for an arrest warrant for founder Kim Beom-su. Financial Supervisory Service Chairman Lee Bok-hyun has even hinted at the possibility of penalizing the Kakao corporation, causing the impact of the case to grow increasingly significant.

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