FSS raids KB headquarters over alleged insider trading

A pedestrian walks past KB Kookmin Bank's headquarters on Yeouido in Seoul in this undated file photo. Yonhap

By Lee Min-hyung

The Financial Supervisory Service (FSS) raided KB Kookmin Bank's headquarters in Seoul, Wednesday, to look into whether some employees there had engaged in suspicious stock trading by using undisclosed internal information.

Employees are suspected of having reaped unfair gains worth billions of won directly through insider trading and helping others make similar trading profits. Their combined gains came in at 12.7 billion won ($9.48 million) between January 2021 and April 2023, according to the watchdog.

They allegedly purchased shares of 61 listed firms here while handling works on their capital increase, and sold them shortly after their stock price rose following the filings by the companies. They engaged in unfair trading activities by using their own stock accounts and those of family members.

According to the FSS, the suspects allegedly made 6.6 billion won in illicit profits. They also shared the information not just with their families but also with acquaintances ― such as colleagues in other divisions and accountants ― helping them achieve unfair trading gains worth 6.1 billion won.

Investigators from the watchdog have seized computers and relevant documents to prove the details of the case. The FSS' capital market special judicial police are also investigating how many others have been able to generate the gains after receiving information from the KB officials.

The FSS and the Financial Services Commission notified the prosecution of the case on Aug. 9.

“Some bank employees made ill use of internal information that typical retail investors can never access prior to the listed firms' official filing on the capital increase,” an official from the watchdog said. “They have seriously undermined investors' trust by seeking profits with the unfair activity.”