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Kim Yong-beom, Vice Chairman of Meritz Financial Group. (Photo courtesy of Meritz Financial Group) |
[Alpha Biz= Lee Joonhyun] Prosecutors investigating allegations of insider trading involving former executives of Meritz Fire & Marine Insurance have expanded the scope of their probe to include senior management at the group level, conducting search and seizure operations targeting the vice chairman of Meritz Financial Group.
According to legal sources on January 9, the Financial Investigation Division 1 of the Seoul Southern District Prosecutors’ Office conducted search and seizure operations the previous day at the headquarters of Meritz Securities in Yeongdeungpo, Seoul, as well as at the office of Kim Yong-beom, Vice Chairman of Meritz Financial Group.
This marks the first time that core executives of the Meritz Group have been subject to compulsory investigative measures in connection with the case.
In July last year, the Securities and Futures Commission filed a criminal complaint against a former CEO of Meritz Fire & Marine Insurance and an executive at the managing director level, alleging violations of the Capital Markets Act.
The individuals are suspected of purchasing shares through family-owned accounts after obtaining advance knowledge of a merger plan announced in November 2022, under which Meritz Financial Group planned to incorporate Meritz Fire & Marine Insurance and Meritz Securities as subsidiaries.
Following the public announcement of the merger plan, share prices of the related companies surged, and the suspects allegedly sold their holdings to secure illicit gains amounting to several billion won.
Prosecutors had previously conducted search and seizure operations in September last year at the offices of Meritz Financial Group and Meritz Fire & Marine Insurance, as well as at the residences of the suspects, formally launching the investigation.
Through the latest operation, prosecutors are reportedly examining the role played by Vice Chairman Kim in the sharing and management of information related to the merger and shareholder return policies. Beyond individual misconduct, investigators are also expected to scrutinize whether there were structural issues in the group’s information control and decision-making processes.
Under the Capital Markets Act, the use of material non-public information resulting in illicit gains exceeding 5 billion won may be punishable by life imprisonment or imprisonment of at least five years.
Prosecutors plan to review the seized materials before determining whether to summon additional individuals for questioning and pursue further compulsory investigative measures.
Alphabiz 이준현 기자(wtcloud83@alphabiz.co.kr)
