Regulator unveils measures to bolster internal control at financial firms
SEOUL, Oct. 17 (Yonhap) -- South Korea's financial watchdog on Wednesday unveiled measures to bolster internal control mechanisms at firms after a series of blunders that raised concerns about the nation's stock trading system.
The Financial Supervisory Service (FSS) set up a task force with outside experts in June to address worries over internal control at financial firms.
Under the measures, board members of financial firms will take more responsibility for internal control systems.
Financial firms will be required to review ethical issues when they pick executives, according to the FSS.
The role of officials responsible for monitoring companies' compliance with the law will be strengthened at small and medium-sized financial firms.
Currently, a law requires financial firms with assets worth more than 5 trillion won (US$4.4 billion) to have such officials.
Samsung Securities Co. has been under a firestorm of criticism after it mistakenly paid stocks to its employees as dividends in April.
The brokerage had originally planned to pay dividends of 1,000 won to its employees. However, it mistakenly paid 1,000 shares for each stake owned by its workers.
The chaos happened after a Samsung Securities trader made a keyboard entry mistake, typing "shares" instead of "won" in Korean when sending the dividends.
The brokerage issued 112 trillion won worth of "ghost" shares, and 16 employees at Samsung Securities sold off a combined 5.01 million shares. The sell-off occurred despite advisories being sent to employees, raising concerns about the brokerage's trading system and moral hazard among its workers.
kdh@yna.co.kr
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