The Fair Trade Commission (FTC) is expected to impose record fines in a case involving collusion among securities firms and banks regarding treasury bond bids. The FTC has classified this collusion as a "very serious violation" of the law, with fines potentially reaching tens of trillions of won.
On August 6, the FTC held a background briefing at the government complex in Sejong City regarding the treasury bond bidding collusion case. Last March, the FTC sent a review report to the treasury bond primary dealer (PD) firms involved. This report serves as a formal indictment, initiating the review process.
The firms under investigation include ten securities companies: Kyobo Securities, Daishin Securities, Meritz Securities, Mirae Asset Securities, Samsung Securities, Shinhan Securities, NH Investment & Securities, KB Securities, Korea Investment & Securities, and Kiwoom Securities, as well as five banks: Kookmin Bank, NongHyup Bank, Industrial Bank of Korea, Hana Bank, and the Small and Medium Business Bank.
Treasury bonds, issued by the government for funding, are awarded through competitive bidding, where the lowest interest rate offered wins. Only 18 certified firms (PDs) are allowed to participate in the bidding process. Among these, three firms were excluded from the investigation due to a lack of evidence of collusion.
FTC investigators believe that the firms engaged in collusion and information exchange during the bidding process from January 2020 to June 2023, a period of approximately three and a half years.
The investigators determined that their actions constitute a "very serious violation" under the Fair Trade Act. They have recommended corrective measures, the imposition of fines, and the filing of criminal charges against the corporations and individuals involved.
The estimated value of the bids affected by this collusion is approximately 76.2 trillion won. For very serious violations, fines can reach up to 20% of the firms' sales, which could amount to nearly 15 trillion won. An FTC official stated, "The commission will calculate the fines according to the law."
If this occurs, it could change the record for the largest single fine ever imposed by the FTC. The current record is 1.0311 trillion won, which was levied against Qualcomm in 2023.
The FTC's review report is approximately 12,000 pages long, including evidence materials. To ensure the defendants' right to defense, the FTC has granted a six-month period for submitting opinions, including an extension.
The FTC plans to hold multiple plenary sessions starting as early as this month to review the case. Earlier, FTC Chairman Joo Byeong-ki stated at a press conference marking the government's first anniversary in May that the commission aims to review major cases, including the treasury bond bidding collusion, as soon as possible in the third quarter.
* This article has been translated by AI.
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