Police have launched an investigation after LS Securities executed stock orders sent via hacked, fake emails, leaving a foreign investor with losses worth several billion won.
According to the securities industry on the 8th, the Seoul Metropolitan Police Agency's cyber investigation unit is investigating a case in which funds belonging to a foreign investor, identified as A, were withdrawn without authorization while an LS Securities employee processed A's stock orders via email earlier this year.
The perpetrator is said to have taken over A's email and repeatedly instructed LS Securities to execute stock trades and withdraw cash. The losses are reported to be in the range of 3 billion to 4 billion won. Taking into account investment opportunity expense and other factors, A reportedly claims losses of around 8 billion won.
LS Securities placed orders as the investor's standing agent. A standing agent is a system in which procedures such as investment registration, account opening, and exercise of rights are handled on behalf of foreigners residing overseas when they conduct transactions in domestic stocks.
However, LS Securities says its system was not hacked and that it executed the orders after going through identity verification procedures required by financial authorities. The firm also said it detected red flags in an order pattern that differed from usual and directly asked the police cyber investigation unit to open a probe.