147 FSS Employees Caught Violating Stock Trading Rules Over Past 6 Years... Only 4 Disciplined

Although violations of stock trading regulations by executives and employees of the Financial Supervisory Service (FSS), the financial regulatory body, have been caught every year for the past six years or so, only about 2% of these cases have led to disciplinary action.

With financial investment product holdings increasing by more than 50% over the past six years or so, critics point out that internal controls need to be strengthened.

According to data submitted by the FSS to Representative Park Sung-hoon of the ruling People Power Party, a member of the National Assembly's Political Affairs Committee, on September 14, a total of 147 FSS executives and employees were caught violating stock trading-related regulations, including the Capital Markets Act and the employee code of conduct, from 2020 to July 2026.

By year, there were 31 in 2020, 11 in 2021, 28 in 2022, 14 in 2023, 22 in 2024, and 23 in 2025, while 18 people were caught by July of this year.

Amid continuing violations every year, the number of people caught this year has already surpassed half the total from last year.

The increase in violators appears to be linked to the stock market boom in the first half of the year.

The Capital Markets Act imposes trading restrictions on executives and employees of financial companies to prevent unfair practices or conflicts of interest, and FSS employees must also comply with these rules.

They are required to trade using only a single account under their own name and report their trading details on a quarterly or monthly basis.

However, among them, only 4 people (2.7%) received disciplinary action under personnel management regulations.

There were 2 cases of pay cuts and 2 reprimands, while the rest ended with mere cautions or warnings rather than formal disciplinary action.

As rule violations continued to surface, the total scale of financial investment product holdings and the number of holding employees also increased.

The reported financial investment product holdings of FSS executives and employees reached 30.56 billion won last year, an increase of 11.008 billion won (56.3%) compared to 2020.

The number of holders rose by 246 (41.9%) to 833, and the average holding per person increased by 3.4 million won (10.2%) to 36.7 million won.

In particular, last year saw increases across all three metrics—total holdings, number of holders, and holdings per person—compared to the previous year.

Although all three indicators decreased slightly in 2024, they increased last year by 5.513 billion won (22.0%), 59 people (7.6%), and 4.3 million won (13.3%), respectively.

Critics point out that because the FSS is a regulatory body that handles market information during the inspection and supervision of financial companies and investigations into unfair trading, it requires a much higher level of conflict-of-interest prevention and self-trading management than regular financial institutions.

Representative Park Sung-hoon said, "The FSS's slap-on-the-wrist punishments and protection of its own people are fueling the moral hazard of executives and employees," adding, "As the scale of stock holdings by employees continues to grow, the internal control system must be re-examined and the level of punishment strengthened."

(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.