Korea’s Security Trading Cards – Fraud prone area. Will 2FA work?


Retail customers in Korea prefer to reap the benefits of Stock Exchanges via the Security Trading Cards. Security trading cards are an essential feature to log on to the ‘Home Trading Systems (HTS)’.

HTS is a system which allows individual investors to trade stocks and futures directly from their homes or offices via wired or wireless communication channels such as the internet, mobile phones, PDAs and others.

To ease the stock trading process, stock brokers used to advise their clients to hand over their Security Trading Cards to the stock brokers.    And, here is where the embezzlement trail started.

After customer complaints and investigation, South Korea’s Financial Supervisory Service (FSS) found enough reasons to order Woori Investment & Securities, one of the largest securities firms in the country, to dismiss two stockbrokers, including a branch manager, engaged in embezzlement, regulatory officials said on Sunday.

The regulator said it has uncovered incidences of embezzlement of 1.39 billion won (US$1.14 million) committed at two branches in Seoul and Busan of Woori Investment.

The manager of Woori Investment’s Suyeong branch in Busan pocketed 665 million won from five customers’ accounts two years ago, FSS officials said.

The branch manager was found to have taken the illicit possession of the money 23 times between March and December 2011.

The FSS also found that a female employee in charge of a division chief at a Woori Investment & Securities branch in the Gangnam Ward, southern Seoul, had embezzled 731 million won of retail customers’ money for the past four years.

Its four brokers including the manger were slapped with fines of 25 million won. Further, two employees of the four will be subject to “salary reduction.”

Hopefully, with adequate publicity of this case, Koreans will be less inclined to hand over their Security Trading Cards. Or, maybe it is time to introduce 2FA (2 Factor Authentication) for the security trading cards too.


*US$1=1,106.19 won


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