Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
Meritz Securities sanctioned for capital market act violations
The headquarters of Meritz Securities in Yeouido, Seoul / Courtesy of Meritz Securities
By Anna J. Park
By Anna J. Park
The Financial Supervisory Service (FSS) imposed a penalty of 2 billion won ($1.52 million) as well as an organizational warning to Meritz Securities for various violations of the Capital Markets Act. The financial authority also advised the firm to reprimand 64 staff members, including suspension of work, cutting wages and issuing warnings, for their diverse violations.
According to the FSS, Meritz Securities was given the set of sanctions earlier this week, as a result of the financial regulator's regular on-spot inspection conducted in 2021. The securities company was found to have violated numerous obligations stipulated by the country's Capital Markets Act.
For instance, the brokerage company didn't follow procedural rules for selling fund products, such as giving a full explanation on the nature of the risk accompanied when a retail investor purchases a private equity fund product. The company also instructed an employee who was not qualified to sell an investment product to advise customers on investment.
The brokerage is also found to have been involved in cases in which company employees were using accounts that were not officially reported to the firm and in which staff imposed unwarranted additional fees on customers.
In addition, the financial authority said the firm needs to make improvements in consumer protections including in overseas market investment, password management, IT audits and information technology strategic planning. The watchdog agency also urged the securities firm to strengthen foreign exchange liquidity.
In total, the financial watchdog agency reprimanded the firm on 14 items, issued cautions on five items and suggested improvements on 16 items.