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| Former Justice Minister Choo Mi-ae / Korea Times photo by Bae Woo-han |
Financial regulators want stock crime investigation team restored
By Park Jae-hyuk
Attention is being focused on the Ministry of Justice's ongoing review of restoring the joint prosecution team on securities crimes, which received severe backlash from former Justice Minister Choo Mi-ae who disbanded the team in January last year as part of efforts to reduce "direct investigations" by prosecutors.
Since its launch in May 2013, the Stock Crime Joint Investigation Team under the Seoul Southern District Prosecutors' Office had been dubbed the "Grim Reapers of Yeouido," as the team, comprised of prosecutors, investigators and officials from the Financial Services Commission (FSC), the Financial Supervisory Service (FSS) and the Korea Exchange, was able to launch investigations without FSS inspections if the FSC regarded a case as a "serious financial crime."
Until the team's abolishment, it indicted 965 individuals for violations of the Capital Markets Act. These include former executives of Goldman Sachs and Daiwa Securities, who allegedly made unfair profits by manipulating stock prices.
Choo, however, wrote on Facebook, Thursday, that its members had been misinterpreted as financial experts because they had conducted illegal investigations by using prisoners with financial knowledge.
"After hearing the news that the justice ministry will restore the team, I have been worried about the resumption of unfair bargaining between prosecutors and prisoners," she wrote.
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| Justice Minister Park Beom-kye speaks to reporters at the Government Complex Gwacheon in Gyeonggi Province, Wednesday. Yonhap |
Her remarks came out after incumbent Justice Minister Park Beom-kye told reporters a day earlier that the team's reinstatement is under review. This was in response to the reports that the ministry was in talks over an organizational reform of the prosecution regarding the team's possible return.
"After the illegal speculations by Korea Land and Housing Corp. (LH) employees, I have heard what comes next after real estate is securities," he said. "The buoyancy of the KOSPI and Kosdaq is good news, but I have been concerned about stock price manipulation, false disclosure and violations of the Capital Markets Act using false information."
Although he stayed mum about specific measures, he hinted at a high probability of the team's restoration, saying there had been "a few" illegal investigations "in the past," when he was asked Thursday for his opinion on his predecessor's remarks.
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| Prosecutors stand in front of the Stock Crime Joint Investigation Team's office when the team was transferred to the Seoul Southern District Prosecutors' Office from the Seoul Central District Prosecutors' Office in February 2014. Yonhap |
The financial authorities and securities industry insiders appear to be welcoming the justice ministry's possible move because the team's abolishment has slowed the handling of crimes in the capital market, which has had a negative impact on victims, most of whom are retail investors.
FSC Chairman Eun Sung-soo said in a National Assembly audit last October that he had demanded Choo reinforce the organization for stock crime investigations. Industry insiders said market manipulators have apparently enjoyed benefits after the team was disbanded.
Due to the concerns, Rep. Yoon Han-hong of the main opposition People Power Party proposed a revision to the Prosecutors' Office Act to obligate the prosecution to run the Stock Crime Joint Investigation Team.
