Bloomberg News

Ex-Credit Suisse Staff Charged in South Korea for Unfair Trades

June 07, 2011

June 7 (Bloomberg) -- Two former employees of Credit Suisse Group AG’s Hong Kong branch were charged by South Korea prosecutors with making 23.6 billion won ($22 million) in unfair profits through convertible-bond and stock transactions.

The pair invested in 12 companies between April 2005 and May 2006 by acquiring 101 billion won of bonds that could convert into shares while at the same time borrowing stock from the 12 companies, the Seoul Central District Prosecutors’ Office said in a statement on its website today.

They collaborated with two former officials of the Seoul- based Kyobo Securities Co., the arranger of the convertible bond sales, according to the statement. Prosecutors said in the statement that the convertible-bond purchases were reported to regulators while the stock transactions were kept secret. The Korea Times reported the charges yesterday.

Sheel Kohli, a spokesman at Credit Suisse in Hong Kong, declined to comment. Officials at Kyobo Securities were not immediately able to comment.

Four of the 12 companies invested in are no longer listed and most of the remaining companies are financially weak, according to the statement.

--Editors: Brett Miller, Douglas Wong

To contact the reporter on this story: Shinhye Kang in Seoul at skang24@bloomberg.net.

To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net.


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