Jeong Young-chae, President of NH Investment & Securities, Park Jung-rim, President of KB Securities, and Yang Hong-seok, Vice Chairman of Daishin Securities, among others, have had the final decision made on sanctions against CEOs related to the Lime and Optimus fund sales companies.
On the 29th, the Financial Services Commission held a regular meeting and decided on severe disciplinary actions, including a 3-month suspension and a reprimand warning, for Park Jung-rim, President of KB Securities, and Jeong Young-chae, President of NH Investment & Securities. Vice Chairman Yang Hong-seok of Daishin Securities was the only one to avoid severe punishment, as his disciplinary level was lowered by one step from the previous sanction.
The levels of sanctions against financial company executives are divided into five stages: △recommendation for dismissal △suspension △reprimand warning △cautionary warning △caution. Among these, disciplinary actions of reprimand warning or higher are classified as severe sanctions, as they restrict reappointment and employment in the financial sector for 3 to 5 years.
President Park Jung-rim’s term was extended by one year at the end of last year, and she has been serving as KB Securities’ president for four years. President Jeong Young-chae, who has been leading since 2018, also succeeded in a third consecutive term last March after the Optimus fund incident, maintaining his position for six years. This third consecutive term is the first in NH Investment & Securities’ history. Vice Chairman Yang Hong-seok, who was president during the Lime fund period, was promoted to vice chairman in 2021, with his term lasting until March 31, 2024. Due to the severe sanctions, the reappointments of President Park Jung-rim and President Jeong Young-chae, whose terms expire in March next year, have effectively failed.
Earlier, the Financial Supervisory Service held a disciplinary review committee in November 2020 and decided on severe disciplinary actions of 'reprimand warning' for Park Jung-rim and Vice Chairman Yang Hong-seok due to violations such as failure to establish internal control standards related to the Lime fund incident (violation of the Financial Company Governance Act). In March 2021, President Jeong Young-chae was also decided to receive a severe disciplinary action of 'reprimand warning' for violations including failure to establish internal control standards related to the sale of the Optimus fund. The disciplinary review committee of the Financial Supervisory Service is an advisory body to the Financial Supervisory Service Commissioner and does not have legal effect; final decisions must be made through the Financial Services Commission to take effect.
Subsequently, during the Financial Services Commission’s deliberation stage, the level of sanctions against President Park was raised to 'suspension,' and she recently received prior notification. Typically, the Financial Services Commission follows the principle of prior notification when the disciplinary level rises above the disciplinary review committee’s decision. The suspension measure against President Park was finalized at this regular meeting. The existing Financial Supervisory Service measures were applied as is to President Jeong, and Vice Chairman Yang’s sanction was downgraded from the Financial Supervisory Service’s 'reprimand warning' to a 'cautionary warning.'
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
