Lee Chanjin Stresses Need for Investigative Authority: "Wasting 11 Weeks on Unfair Trading Cases"

Lee Chanjin, Governor of the Financial Supervisory Service, once again emphasized the need to introduce investigative authority for special judicial police officers (special investigators) in response to the structural limitations of the current system for addressing unfair trading in the capital market. He pointed out that, under the current system, even in urgent cases, it takes several months just to go through administrative procedures, making it difficult to respond swiftly.

Yonhap News Agency

On January 5, at a New Year's meeting with the press held at the Financial Supervisory Service in Yeouido, Governor Lee stated, "Even in cases where an immediate investigation is required based on our findings, it takes about 11 weeks to go through the Sanctions Review Committee and the Securities and Futures Commission," adding, "If we waste three months like this, all the evidence may be destroyed."

According to financial authorities, discussions are underway, led by the Office for Government Policy Coordination, to strengthen the role of special investigators. It is known that the possibility of granting investigative authority to special investigators at the Financial Supervisory Service is also under consideration.

However, even if investigative authority is granted, the plan is to limit its scope to unfair trading under the Capital Markets Act. He stressed, "We do not intend to cover all crimes," and clarified, "It will be limited to cases of unfair trading under the Capital Markets Act that have been planned and investigated by the Financial Supervisory Service."

He also explained the proposed procedures for investigations. "Our idea is for the Financial Supervisory Service and the Financial Services Commission to jointly form an Investigation Review Committee," he said. "The committee will decide whether to proceed with an investigation and report that information to the Securities and Futures Commission." He added, "We are discussing with the Financial Services Commission a system where the process and results are reported directly to the Securities and Futures Commission, ensuring both checks and balances and transparency."

Additionally, he outlined plans to expand the Joint Response Team for the Eradication of Stock Price Manipulation. Currently, financial authorities are considering expanding the team from one unit to two. During the Financial Services Commission's business report to the President on December 19 last year, the President suggested, "Would it not be possible to create one or two more teams within the Joint Response Team to foster competition?" emphasizing the need for a competitive structure.

Governor Lee particularly stressed the need for a separate forensic team. He said, "Case processing is currently delayed due to forensic analysis," explaining, "In some cases, it takes more than a week to conduct forensic analysis on a single mobile phone." He continued, "I plan to propose deploying additional organizational units and forming a separate forensic team so that the response teams can share forensic capabilities."

Meanwhile, regarding the sale of shares by Coupang executives, he also mentioned the possibility of cooperation with overseas regulatory authorities. He said, "As soon as relevant issues are identified in the joint investigation, we will select the matters to request from the U.S. Securities and Exchange Commission (SEC)."