Separate Fund to Be Established Exclusively for Whistleblower Rewards on Collusion and Stock Price Manipulation

System Overhaul to Boost Whistleblowing
Following President Lee’s Directive

A separate fund will be established to encourage public interest whistleblowing on anti-market practices such as collusion and stock price manipulation. This follows President Lee Jaemyung’s directive at the Cabinet meeting in February to "substantially increase reward payments for whistleblowers to change their lives," as part of efforts to eradicate unfair practices.

On May 12, the Ministry of Planning and Budget announced plans to launch the "Public Interest Whistleblower Incentive Fund" to promote public reporting against anti-social acts that harm the national economy and social order.

The current whistleblower reward system operates within the annual budgets of each government agency, making it difficult to pay sufficient rewards in a timely manner. Additionally, as it is impossible to predict the volume of whistleblowing in advance, it has been challenging to estimate the annual budget ahead of time.

To address these issues, the Ministry plans to establish a fund to manage whistleblower reward resources, which are currently distributed across various agencies, in an integrated manner. The fund will allow for autonomous adjustments within a 20% range, enabling more flexible operations.

The fund’s expenditures will prioritize areas where the urgency of incentivizing public interest whistleblowing is high and where monetary sanctions such as fines, penalties, or recoveries are directly linked.

Priority will be given to cases such as collusion reporting handled by the Fair Trade Commission and reporting of stock price manipulation or accounting fraud overseen by the Financial Services Commission. Rewards for reporting fraudulent subsidy claims will also be covered. Currently, some agencies including the Financial Services Commission are preparing reforms to completely remove caps on reward payments.

The system will be designed to provide sufficient compensation to whistleblowers, based on their level of contribution to the recovery of illicit gains, imposition of fines, or detection of criminal acts.

The fund will also be used to support projects such as education for the prevention of anti-social behavior and legal assistance to indirectly support victims.

The Ministry of Planning and Budget will oversee overall fund management, while specific operational measures, including common criteria for reward payments, will be discussed by a fund operation review committee involving relevant agencies.

The total size of the fund has not yet been determined. It will be finalized after taking into account the current scale of reward payments made by each agency.

The Ministry aims to draft the special law within this month, complete the legislative process by August, and ensure that the fund is reflected in next year’s budget.

Cho Yongbeom, Director of the Budget Office at the Ministry of Planning and Budget, stated, "Public interest whistleblowing is an important institutional mechanism that supplements the government’s capacity to monitor anti-social acts," and added, "Through this fund, we will further support internal and public reporting of anti-competitive practices, capital market misconduct, and fraudulent subsidy claims."

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