Seoul: Rep. Lee Choon-suak, a prominent figure from South Korea's ruling Democratic Party of Korea, is embroiled in a scandal following accusations of stock trading under a borrowed name, which may involve insider trading and false asset declarations.
According to Yonhap News Agency, the controversy emerged when local media captured Lee using a mobile trading app during a parliamentary session. The account, registered under his aide's name, was used to trade shares in companies such as Naver, KakaoPay, and LG CNS, all integral to the government's newly announced artificial intelligence initiative that day. This incident raises concerns about the integrity of South Korea's financial disclosure system and ethical governance, as Lee, head of the economic subcommittee on AI policy, had access to sensitive market information.
The alleged activities could breach the Capital Markets Act, which forbids trading on nonpublic information, and the Financial Real Name Act, requiring transactions to be in the true owner's name. Additionally, Lee's 2024 asset disclosure reported no stock holdings, conflicting with evidence of over 100 million won in assets in the aide's account, violating the Public Official Ethics Act.
Under pressure, Lee resigned from the Democratic Party on Tuesday night. The party has begun expulsion proceedings and removed him from his roles on the Presidential Committee and as chair of the National Assembly's Legislation and Judiciary Committee. Meanwhile, the police have formed a task force to investigate, and civic groups have lodged criminal complaints. The main opposition, People Power Party, is advocating for a special prosecutor, questioning the adequacy of a police-led investigation.
This incident is reminiscent of previous ethical breaches in the National Assembly, such as the 2023 case of Rep. Kim Nam-kook's cryptocurrency trading during sessions. Though Kim temporarily resigned, he returned to office, highlighting the lenient consequences typically faced by Korean lawmakers for ethical violations.
Current regulations have loopholes, allowing lawmakers to evade declaring stock holdings by selling assets shortly before deadlines and not tracking third-party registered holdings. In contrast, stricter regimes elsewhere enforce real-time reporting and broader ownership definitions.
President Lee Jae Myung has demanded a swift investigation, emphasizing during a Korea Stock Exchange visit that unethical stock trading will lead to downfall. This scandal challenges his administration's focus on financial transparency and ethical governance, as it involves a senior policymaker trading on the parliament floor.
To regain public trust, the National Assembly must implement reforms such as prohibiting lawmakers from trading in sectors where they have policymaking roles, mandating real-time public trade reporting, and empowering independent bodies for ethical oversight. Rep. Lee's case exemplifies a broader issue of tolerated opaque asset reporting and blurred lines between public service and private interests, necessitating a firm stance on ethical standards and accountability within South Korea's legislature.