South Korean presidential office senior official faces criminal charges over alleged promotion of leveraged ETFs

Odaily News: According to South Korea's JoongAng Ilbo, Kim Yong-beom, chief of policy at the South Korean presidential office, has been formally reported to prosecutors on charges of abuse of authority, coercion, and obstruction of business for allegedly pushing for the listing of leveraged ETFs linked to single semiconductor stocks. These single-stock leveraged ETFs are believed to have exacerbated market volatility and caused investors to suffer losses amounting to billions of dollars.

Lee Jong-bae, a conservative former Seoul city councilor backed by the opposition People Power Party, said he filed a criminal complaint against Kim Yong-beom with the Supreme Prosecutors' Office on Monday through the government's online petition system. Lee believes that Kim effectively directed financial regulators to consider launching leveraged ETF products linked to single chip stocks.

Lee also claimed that South Korea's Financial Services Commission (FSC) has been internally reviewing a plan since January to establish the necessary regulatory framework and systems in the second quarter, followed by the launch of these products in the second half of the year. Lee said: "Without Kim Yong-beom's instruction, financial regulators would not have hastily pushed for the launch of leveraged ETFs linked to single semiconductor stocks on the eve of the election, disregarding serious market risk warnings." (Jinshi Data APP)