Seoul cracks down hard on foreign banks, securities firms
SEOUL: Korea's financial regulator is taking stricter action against offending global financial institutions.
In addition, it is crossing borders, conducting a probe on Deutsche Bank in Hong Kong on suspicion of triggering a stock market shock last month.
The Financial Supervisory Service (FSS) has slapped penalties on units of Barclays Bank, JP Morgan Chase, Bank of Nova Scotia, OCBC Bank and Nomura Securities.
The Barclays branch received a reprimand, with its four current and former employees punished last week for violating banking rules over foreign exchange trading, the FSS said. The nation's financial watchdog said the Barclays branch was responsible for incurring 36.5 billion won ($31.8 million) in losses for its clients by failing to adopt proper risk-management methods when it traded $1.2 billion of currency options with three local companies between June 2006 and November 2007.
The FSS also said that it failed to file regulatory reports with authorities over currency futures. One staff member at the Seoul branch of JP Morgan Chase was also recently punished for overlooking corporate clients' high-risk trading of over-the-counter financial derivatives worth $189 million.
The branches of the Canada-based Bank of Nova Scotia and Singapore's OCBC Bank each received a reprimand and a fine, for releasing loans in excess of allowable levels, the regulator said.
The Seoul branch of Nomura Securities saw five employees reprimanded for conveying inside information to overseas institutional investors, the FSS said. The regulator said that it is not targeting the foreign financial institutions operating in Korea. -PB News