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The Meritz Securities headquarters building in Yeouido, Seoul. (Photo: Meritz Securities) |
[Alpha Biz= Kim Jisun] SEOUL, Oct. 16 — Over the past five years, dozens of employees across South Korea’s financial sector have been caught using borrowed-name (proxy) accounts, with related transactions totaling more than 4,000 cases and involving investment principals worth nearly ₩7 billion (≈ USD 5 million), according to data disclosed by the Financial Supervisory Service (FSS).
The findings were obtained by Rep. Kang Min-kuk of the ruling People Power Party, a member of the National Policy Committee, who requested detailed data from the FSS titled “Records of Detected Borrowed-Name Account Use in the Domestic Financial Sector.”
From 2021 through August 2025, a total of 56 cases of borrowed-name account use were detected, involving 3,750 transactions and a maximum investment principal of ₩6.811 billion.
The securities and investment sector accounted for the vast majority of cases, with 55 incidents (98.2%), involving 3,557 transactions (94.9%) and ₩6.77 billion (99.4%) in investment principals.
By institution, Samsung Securities reported the highest number of violations in 2022, with 22 employees found to have breached internal trading restrictions, engaging in 1,071 transactions with a combined investment principal of ₩2.13 billion.
It was followed by:
Meritz Securities (2023): 16 employees, 1,711 transactions, ₩1.463 billion
Hana Securities (2022–2025): 7 employees, 444 transactions, ₩1.78 billion
The banking sector recorded just one case (1.8%), at BNK Kyongnam Bank in 2023, involving an employee’s illegal use of a borrowed-name account for 193 transactions totaling ₩41 million.
By reason for detection, the breakdown was as follows:
Violation of employee investment trading restrictions: 48 cases, 3,154 transactions, ₩5.138 billion
Violation of employee trading ban: 1 case, 403 transactions, ₩1.632 billion
Illegal borrowed-name trading by a bank employee: 1 case, 193 transactions, ₩41 million
Violation of the Real-Name Financial Transaction Act (account brokering): 1 case
Rep. Kang criticized the lenient penalties, noting that despite dozens of violations, no criminal charges were filed. Under the Financial Investment Services and Capital Markets Act, violations are punishable by up to three years in prison or a fine of up to ₩100 million, yet none of the 55 detected cases were referred for prosecution.
Disciplinary actions were limited to one dismissal and 14 suspensions, while the highest administrative fine imposed was ₩25 million.
Similarly, the single Real-Name Financial Transaction Act violation — which carries a maximum five-year prison term or ₩50 million fine — resulted only in the lowest possible internal penalty: an official “warning.”
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
