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Prosecutors investigate allegations of "hasty introduction of single-stock leverage ETFs"... Case assigned to Kim Yong-beom and Lee Eok-won

Machine translated

Prosecutors are investigating a complaint alleging that financial authorities pushed forward the introduction of single-stock leverage Exchange Traded Funds (ETFs) without sufficient risk verification.
According to legal circles on the 8th, the Seoul Central District Prosecutors' Office assigned the complaint against former Presidential Secretary for Policy Kim Yong-beom and Financial Services Commission Chairman Lee Eok-won to the 1st Criminal Division (Acting Chief Prosecutor Lee Ju-hee) on the 5th.
Former Seoul City Council member Lee Jong-bae filed a complaint with the prosecution against former Secretary Kim on the 3rd of last month on charges of abuse of authority, obstruction of exercise of rights, and obstruction of business. Following this, on the 6th of the same month, he filed a complaint against Chairman Lee on charges of dereliction of duty and abuse of authority, among others.
Former Council member Lee questioned the circumstances under which the launch of ETF products was moved forward from the original plan. According to data obtained by Lee from the Financial Services Commission (FSC), the FSC's "Report on Measures to Resolve Asymmetric ETF Regulations" prepared last January planned to allow single-stock ETFs for domestic blue-chip stocks, with a plan to launch products in the second half of the year following legal amendments and system development during the second quarter.
However, the relevant enforcement decree amendment passed the Vice Ministers' Meeting and the Cabinet Meeting in April, and single-stock leverage ETF products were launched at the end of May. In a media interview last January, former Secretary Kim stated that he had ordered the review regarding the introduction of single-stock leverage ETFs.
In the complaint, former Council member Lee argued, "Had there been no instructions from Secretary Kim, the financial authorities would not have hastily introduced single-stock leverage ETFs, which are expected to cause extreme side effects, right before the election," claiming that Kim's instructions constitute abuse of authority by interfering with the independent performance of duties by financial authorities.
Regarding Chairman Lee, the failure to conduct separate verification before the product launch was also called into question. Lee argued, "(Chairman Lee) may have intentionally omitted stress tests," adding, "Failing to conduct stress tests, which should have been performed to ensure investor protection and financial market stability, constitutes a dereliction of duty."
FSS Governor Lee Chan-jin stated during a press conference in June regarding the introduction process of single-stock leverage ETF products, "It is true that preparations were rushed at the time," and "I personally reflect on the situation, feeling that I should have stood my ground to stop it."
Setting punishment aside,
I want to know the full context.
There have been articles all along regarding the violation of procedures and pressure without testing.

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