South Korea fines 15 brokerages, banks $1.2 billion for bond auction collusion

South Korea's Fair Trade Commission (FTC) has imposed fines totalling 1.6 trillion won ($1.2 billion) on 15 domestic brokerage firms and banks for colluding in government bond auctions over a period of more than three years, as per a report by Reuters on Wednesday.

The regulator said the financial institutions exchanged sensitive bidding information between January 2020 and June 2023, coordinating their strategies through phone calls and the Telegram messaging app shortly before auction deadlines.

According to the FTC, the 15 primary dealers shared information about their intended bidding yields one or two minutes before the submission deadlines across 150 government bond auctions, the report stated.


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The firms directly agreed on bidding yields and volumes in 145 of those auctions, undermining competition in the government bond market, the regulator said.

The FTC said the coordinated activities artificially pushed up South Korean government bond yields, distorting the auction process and affecting market outcomes.

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The regulator expects the penalties to strengthen competition in government bond auctions and improve the efficiency of the country's fiscal management, according to Reuters.


(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)