Regulator to further penalize Kookmin, CitiBank
Choi Gi-eui, former KB Kookmin Card CEO
FSS to hold disciplinary review committee meeting on Oct. 2
By Chung Ah-young
The financial regulator said Sunday that it may impose additional penalties on officials responsible for large-scale data thefts that occurred earlier this year.
The Financial Supervisory Service (FSS) said that it will hold a disciplinary review committee meeting on Oct. 2 to discuss the severity of sanctions towards executives and employees of three credit card firms ― KB Kookim, NH NongHyup and Lotte ― and Standard Chartered Bank Korea and CitiBank Korea for the customers’ data theft in January.
The three credit card firms were already slapped with a three-month suspension from signing up new customers. CEOs and executives from the three companies have been given prior notice of their upcoming punishments, which are expected to be heavy. Some punishments that will be levied are equivalent to forced resignations; but a final decision has yet to be made.
The three companies were a major part of the massive theft of some 140 million customers’ data which left the nation in shock and panic this year.
The largest-ever data theft occurred when an employee from a personal credit ratings agency, the Korea Credit Bureau (KCB), was found to have stolen personal information, including resident registration numbers, bank account numbers and credit ratings.
Some 53 million pieces of data from Kookmin Card, 25 million from NongHyup Card and 26 million from Lotte Card were leaked.
In December last year, the data of some 130,000 customers were stolen from Citibank and Standard Chartered Bank Korea. The FSS discovered that a Citibank employee and a staff member at SC Bank’s subcontracted IT center allegedly sold the banks’ client data to private loan companies.
Top executives of the companies, including former KB Kookmin Card CEO Choi Gi-eui and former SC Bank Korea CEO Richard Hill, are expected to attend the meeting to defend themselves.
The committee will decide on appropriate punishments after hearing from them. As financial authorities recently imposed heavy penalties on former KB Financial Group Chairman Lim Young-rok and the ex-head of its flagship banking unit, Lee Kun-ho, the level of discipline the executives will receive is attracting much attention.
The FSS originally planned to finalize the decision on the punishments in June but
due to the KB scandal over internal disputes and other irregularities, it was pushed back several months.
“We will finalize the disciplinary measures on the information theft case within the next month. This punishment has been long overdue,” an FSS official said.
The service will also punish officials of Woori Bank for the unfair sales of investment trust products involving the “Pi-City” project, a commercial distribution center and a shopping mall in Yangjae-dong, southern Seoul and for involvement in CJ Group’s slush funds next month.
Officials of Shinhan Bank will also face disciplinary measures for illegal accessing customer information. The FSS investigated the bank’s access to records of 1.5 million customers by its management audit and inspection divisions from April to September 2010.