Financial Supervisory Service, institutional warning and fines
Financial authorities imposed sanctions on BNK Gyeongnam Bank, where an embezzlement worth 300 billion won occurred, after illegal borrowed-name transactions by employees were revealed.
According to the financial sector on the 27th, the Financial Supervisory Service imposed an institutional warning and a fine of 110 million won on Kyongnam Bank on the 21st for illegal borrowed-name trading by employees and incomplete sales of private equity funds.
Mr. A, a former branch manager at Kyongnam Bank, used a borrowed-name account in his mother-in-law’s name to trade stocks a total of 193 times over 53 days between April 2018 and July 2020. Mr. A’s total trading volume during this period amounted to 213.3 million won. He also failed to fulfill his obligation to notify sales details that occurred seven times in the transaction.
Mr. A opened a deposit account for deposits and withdrawals and two securities accounts in his mother-in-law’s name at the place where he worked as a branch manager. Even though the mother-in-law did not visit the branch, she put her stamp on the customer signature line, copied a copy of the resident registration card, cut it out, and reused it, making it look like the mother-in-law had personally requested the account opening.
Kyongnam Bank was found to have violated its duty of explanation by selling 207 private equity funds (subscription amount of 37.63 billion won) to 195 general investors at 63 branches between March and August 2019. The sanctions also include violations of the obligation to report loans collateralized by equity securities exceeding 20% and the obligation to ensure the safety of electronic financial transactions.
Meanwhile, BNK Financial Group is strengthening internal control after it was revealed that a Gyeongnam Bank executive who manages funds related to real estate project financing (PF) loans had embezzled more than 300 billion won. BNK Financial recently excluded some special positions unrelated to financial transactions and transferred long-term employees without exception.
Reporter Kim Soo-yeon syeon@donga.com
2023-12-27 18:00:00
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