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[Alpha Biz= Reporter Kim Minyoung] Financial Supervisory Service Conducts Full Investigation on Securities Firms' Hiring of Individuals with Past Disciplinary Records

The Financial Supervisory Service (FSS) has launched a comprehensive investigation to determine whether securities firms and other financial investment companies have hired individuals with past disciplinary records.

On the 20th, the FSS announced that it has requested securities firms and financial investment companies to submit information regarding the hiring status and job responsibilities of employees with disciplinary histories. This move follows the discovery that Hanyang Securities had employed an individual previously reported to the prosecution for pursuing personal interests related to real estate project financing (PF).

An FSS official stated, "We are investigating to determine whether this issue is isolated to a single securities firm or indicative of a broader problem."

According to the relevant regulations, financial investment companies must evaluate employees' professional qualifications, ethical standards, and compliance awareness during the hiring process. Previously, there was a regulation that prohibited the hiring of individuals who had been disciplined for illegal or improper conduct for five years. However, this provision was removed in 2019 due to concerns about violating the freedom of occupational choice. Instead, firms are now advised to consider disciplinary records during the hiring process, although it is not mandatory, allowing for the possibility of hiring individuals with past disciplinary actions.

The FSS maintains that hiring standards should be stringent, especially since these firms manage clients' assets. The investigation particularly focuses on the case of Hanyang Securities, where the problematic employee moved to the firm almost simultaneously with being reported to the prosecution.

This investigation aims to reinforce hiring practices within the financial sector, ensuring that firms uphold high standards of professionalism and ethical conduct. The FSS's efforts are part of a broader initiative to maintain public trust and integrity in the financial industry.

 

 

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