The Financial Supervisory Service has imposed disciplinary action against Chairman Yoon Kyung-rip, the largest shareholder of Yuhwa Securities, regarding allegations of stock buybacks.
On the 5th, the Financial Supervisory Service announced that it has decided to impose sanctions equivalent to a reprimand on two executives of Yuhwa Securities, including Chairman Yoon. A reprimand is a heavier level of sanction than a warning or advisory and will restrict future employment at financial companies.
Chairman Yoon is accused of misleadingly announcing a stock buyback process at Yuhwa Securities in 2015 and 2016, stating it would provide all investors with a selling opportunity, while actually allowing only certain individuals to sell. He allegedly mobilized employees to engage in matched transactions, exchanging stocks at predetermined times and prices, enabling the equity held by his father to be traded preferentially over orders from other investors.
Chairman Yoon is currently on trial for these charges. In the first trial, he was sentenced to 1 year and 2 months in prison and fined 3 million won, and the second trial is ongoing.
The FSS noted that "the major shareholders of financial investment firms should not demand illegal activities for personal gain that go against the interests of the firms," explaining the grounds for the disciplinary action.