Goldman Sachs Investment Advisory closes Korean unit

28 August 2015

Maeil Business Newspaper

Goldman Sachs Investment Advisory has withdrawn its business from the Korean market amid criminal investigations into allegations of stock price manipulation. According to sources Thursday, Goldman Sachs Investment Advisory shut down its Korean business as of August 21. Regulatory approval to the business withdrawal was granted, which was posted on the Financial Services Commission website.

Goldman Sachs Investment Advisory Korea applied for business cancellation with the FSC on July 23. And then, the Financial Supervisory Service reviewed the application to figure out whether there would be any problem in the investor protection procedure for a month and submitted its opinion to the FSC last Thursday. The FSC approved its business cancellation last Friday before the result was announced.

Market watchers say the company’s closure reflects its business difficulty in Korea due to low income, while it is under pressure due to prosecutors’ probe. The Korean unit spent 650 million won on office rent and other miscellaneous expenses in the first six months of this year, but the income from asset operation was too insignificant to continue its business.

In April, prosecutors launched investigations into alleged stock price fixing by an executive of the company, prompting its US parent to determine that maintaining its Korean business is no longer beneficial, according to sources.

A company official said though the investigations and the business cancellation are coincidental and there is no causal relationship.

Ex-Goldman employee, others, arrested in S.Korea stock probe-Yonhap

27 August 2015

Reuters News

SEOUL, Aug 27 (Reuters) – South Korean prosecutors arrested four people, including a former Goldman Sachs Group Inc employee, suspected of involvement in the manipulation of stock in a small Korean company in 2011, Yonhap News Agency reported on Thursday.

The Southern Branch of Seoul District Prosecutors’ Office on arrested the former Goldman Sachs employee for allegedly receiving about 100 million won ($84,574) and assisting the manipulation of shares in conveyor belt maker Dong Yang P&F by getting other traders to buy shares in the company, Yonhap reported, citing the prosecutor’s office.

It did not say when the arrests took place.

Officials at the prosecutors’ office could not be reached for comment by Reuters.

The former employee was part of Goldman Sachs’ South Korean asset management unit, which announced its shut-down in 2012, the firm’s South Korean unit said in a statement.

The statement said that none of the trading under investigation took place at Goldman Sachs, and that the firm had never bought or sold shares in Dong Yang and has been cooperating with prosecutors since last week.

Other media reports citing the prosecutors’ office said authorities in the same case had also visited Macquarie Asset Management Korea Co Ltd, which was ING Investment Management Korea until Macquarie Group Ltd bought it in December 2013.

A Macquarie spokeswoman declined to comment.

Goldman Sachs raided for alleged stock price manipulation

26 August 2015

Korea Times

By Kim Se-jeong

The prosecution has raided the offices of Goldman Sachs Korea, ING Life Insurance and Macquarie Investment Management Korea, for allegedly stock price manipulation.

It also arrested a former executive at Goldman Sachs Korea, who is now leading a consulting firm, on charges of helping stock price rigging in return for money.

The 49-year-old former executive, whose name was withheld, is accused of connecting officials at Macquarie and ING with a group of stock manipulators, so that the two firms would purchase 630,000 shares of DongYang P&F from the manipulators at an inflated price.

In return for the connection, the executive allegedly received money from the manipulators. The prosecution said the amount of money would be hundreds of millions of won.

Several former and incumbent officials at Macquarie and ING are also under probe, according to the prosecution.

Earlier this year, the prosecution arrested four people involved in the stock price manipulation allegation. To sell the DongYang P&F stock at a high price, they allegedly managed to raise the price through false trades from 10,000 won per share to 14,800 won between March and April in 2011.

The four approached the arrested former Goldman Sachs Korea executive, who then introduced the officials at Macquarie and ING to them to purchase the stocks for the inflated price. The officials are also suspected of having taken money from the manipulators in return for the purchase.

The prosecution also raided SK Securities and two other Korean asset management companies, whose names were not disclosed, for their alleged involvement in the stock price rigging.

 

Former exec of Goldman Sachs arrested over alleged stock price manipulation

27 August 2015

Yonhap English News

SEOUL, Aug. 27 (Yonhap) — A former executive director of Goldman Sachs and three others have been arrested for allegedly manipulating stock prices, prosecutors said Thursday.

The 49-year-old Korean-American, surnamed Kim, is suspected of helping brokers, including a 54-year-old surnamed Choi, find institutional investors to buy manipulated stocks in 2011, the prosecutors at the Southern District Prosecutors’ Office said.

Choi and his accomplices allegedly received 600 million won (US$500,000) to find investors.

Prosecutors allege the money came from three people who were arrested in May on suspicion of manipulating stock prices for local conveyor belt manufacturer Dongyang P&F from 10,000 won per share to 14,800 won.

Prosecutors suspect these people also gave 100 million won to Kim in exchange for helping them find other investors.

Investors from ING Life and Macquarie Investment Management Korea Co., then bought the Dongyang P&F stocks, according to the prosecutors.

Earlier this month, prosecutors raided the local headquarters of Goldman Sachs in central Seoul, as well as the two other investment companies.

“The company is not involved in the incident,” a representative for Goldman Sachs said, underlining that Kim acted independently.

Prosecutors said they are expanding the investigation to find out if some of the money flowed to other institutional investors.