Unauthorized Intraday Gift Trading Beyond Purpose in August
False Registration Like Swap Transactions
Reported to Authorities After Internal Investigation
Legal Action If Necessary
Shinhan Investment Corp. suffered a massive loss estimated at around 130 billion KRW while engaging in on-exchange futures trading during its role as a liquidity provider (LP) for exchange-traded funds (ETFs).
According to industry sources on the 12th, Shinhan Investment Corp. disclosed a major management situation on the 11th, reporting a loss estimated at 130 billion KRW due to on-exchange futures trading and settlement.
The disclosure stated that the ETF liquidity provider (LP) engaged in on-exchange futures trading beyond its intended purpose, resulting in excessive losses, but concealed the loss by falsely registering the trades as swap transactions.
It is understood that this activity began on August 2, and the large losses are presumed to have occurred as the domestic stock market plunged so severely that the day was dubbed "Black Monday."
Shinhan Investment Corp. identified the false swap transaction registrations through its internal control system, confirmed the facts through an investigation, and reported the matter to regulatory authorities. An internal audit is underway, and legal action will be taken if necessary.
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