Goldman Sachs Korea gets warning

Goldman Sachs Group’s Korean unit was cautioned by the nation’s financial supervisor for allowing its Hong Kong unit to sell bond products to local investors without a license, according to a person with direct knowledge of the matter.

The Financial Supervisory Service’s sanctions committee yesterday decided to impose an “institutional caution,” the lowest penalty, against the firm’s Korean securities unit, said the source, who requested anonymity as the decision is not public.

The unit’s head, Choi Suk-yoon, received a “warning,” the second-lowest punishment for executives, the source added.

The FSS began investigating three foreign firms in September as part of a review of derivative sales and other operations for compliance with local rules. It completed the probe of Goldman Sachs the following month, the supervisor said in October.

“The sanctions appear light and probably won’t limit Goldman Sachs’s operations here,” Jang Beom-sik, a professor of business administration at Soongsil University in Seoul, said yesterday. “Still, I understand that Goldman Sachs is highly cautious about its reputation so the company will be more careful to comply with local rules.”

Christopher Jun, a Seoul-based spokesman for Goldman Sachs, declined to comment on the sanctions, as did Choi. Park Mi-kyung, a spokeswoman for the FSS, also declined to comment.

The FSS asked Goldman Sachs to reprimand several other employees, the person said.

Bloomberg