Mirae Asset Daewoo, the largest securities firm by net worth in South Korea, was slapped with a fine of 325.2 million won ($306,000) in December last year over a breach of the Capital Markets Act, according to the Financial Supervisory Service on Tuesday.
Three brokers at Mirae Asset Daewoo, who were not identified to the media, were given penalties such as suspension, wage cut and reprimand by the watchdog a month after their wrongdoings came to light.
(Mirae Asset Group)
Violations by the brokers include misrepresenting facts to customers while selling investment products, failure to notify customers of risks from the investments and sending promotional text messages without specifying potential risks from the investment product.
The activities are considered illegal under the Capital Markets Act in Korea.
Alongside the fine, Mirae Asset Daewoo was given an advisory for selling options by Euro Asset, which investors said has incurred a combined 30 billion won in losses. A month earlier, the brokerage was voted to be placed under advisory.
The latest measure bodes ill for Mirae Asset Daewoo, which has aimed to secure short-term lending rights from the watchdog.
The FSS has also issued warnings to Hanwha Investment & Securities over a breach of duty under the asset management agreement for swindling money from customer accounts. In addition, the FSS disciplined HMC Investment Securities for mishandling discretionary trust.
By Son Ji-hyoung
(
consnow@heraldcorp.com)
