Shinhan Investment Employees Who Hid 130 Billion Won Loss Receive Reduced Sentences on Appeal

Employees of Shinhan Investment Corp. who concealed losses amounting to hundreds of billions of won during the trading of exchange-traded fund (ETF) futures products have received reduced sentences in their appeal trial.

On October 23, the Criminal Appellate Division 3-2 of the Seoul Southern District Court (Presiding Judges Cho Kyuseol, Yoo Hwanwoo, and Lim Sunji) sentenced Mr. Cho, the ETF liquidity provider (LP) work manager, and Mr. Lee, the department head at the securities firm, to two years and six months in prison on charges including fraud.

The court stated, "From the victim's perspective, the defendants caused both tangible and intangible damages," and explained, "Although a significant amount has been deposited as compensation, it is difficult to reflect this fully in sentencing when considering the victims."

Mr. Cho and Mr. Lee incurred losses of 128.9 billion won in August of last year after purchasing ETF futures and experiencing a sharp plunge in the domestic stock market. However, they are accused of falsely registering in the electronic system that they had made a profit of 130 billion won through swap transactions.

They are also accused of manipulating 'management accounting' records, which are used to pay performance bonuses, after incurring losses of 108.5 billion won while managing overseas ETF products in 2023. As a result of these schemes, Mr. Cho and Mr. Lee received performance bonuses of 137.52 million won and 341.77 million won, respectively.