Financial authorities are reviewing options to prevent financial companies that committed wrongful acts or unfair market practices from participating in government-led financial projects or the entrustment of the national pension fund’s operation, industry officials said Friday. The move comes as the authorities seek effective measures that can detrimentally impact financial companies that engaged in illegal or unfair practices.
“Aside from sanctions or prosecution investigation, the Financial Supervisory Service (FSS) will also make sure that problematic financial investment companies cannot gain economic benefits by preventing them from stepping into public domains, such as the fund operation entrusted by the National Pension Service or other government-led projects,” FSS Governor Lee Bok-hyun said earlier this week. “Trust is an essential precondition that must be established for the public to engage in long-term investments,” Lee noted .As various financial accidents, moral hazards and mis-selling cases persist, despite intensified supervision and sanctions by the FSS, financial authorities have begun searching for ways to deliver a substantial blow to financial companies with bad records .Yet, the FSS is still in its research stage regarding the matter, with specific criteria or measures remaining undetermined.
Since last year, the FSS has conducted concentrated inspections on illegal profit-seeking behaviors by financial companies’ major shareholders or their employees. Financial authorities say that the number of violation cases detected through inspections abound and that similar regulatory violations continue to be discovered. Typical cases of such violations include investments using insider information, improper personal financial lending and exertion of undue influences. For instance, one asset manager of a financial company personally invested a certain amount of money in a real estate fund that was managed by another asset management company. Later, the asset manager established a new fund at his company and directly purchased the same real estate using the fund money without informing his own company or investors. This breach of fiduciary duty due to a conflict of interest is one of many cases detected during the FSS’ latest inspections. The FSS chief also warned companies listed on the stock markets, saying that they could face the real possibility 카지노사이트 of being delisted if they engage in unfair practices.