Financial authorities have decided to file a complaint with the prosecution against former executives and employees of Meritz Fire & Marine Insurance, including its former president, on suspicion of using undisclosed merger information for personal gain.
According to financial authorities and industry sources on July 17, the Securities and Futures Commission (SFC) under the Financial Services Commission held a regular meeting the previous day and decided to refer former Meritz Fire & Marine Insurance president A and executive-level official B to the prosecution for violating the Capital Markets Act's prohibition on the use of undisclosed information. They are alleged to have purchased large amounts of stock before the announcement of the Meritz Financial Group merger plan, and then sold them after the stock price rose, earning billions of won in profit.
On November 21, 2022, Meritz Financial Group announced a plan to make its subsidiaries, Meritz Fire & Marine Insurance and Meritz Securities, wholly owned subsidiaries. At the same time, the company announced plans for shareholder returns, including share buybacks and cancellations. The day after the announcement, all three related stocks hit the upper price limit.
Some employees of Meritz Fire & Marine Insurance, including A, bought shares before the merger announcement and sold them not long after the announcement. It is reported that they earned billions of won in profit through these transactions. While they claim they were unaware of the merger plan, financial authorities believe that stricter standards should be applied to senior executives at financial companies.
A Meritz Financial Group representative stated, "We have taken strict personnel measures such as suspending those involved from their duties, and we will do everything necessary to prevent a recurrence. We also plan to actively cooperate with investigations and any actions taken by judicial authorities going forward."
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