Retired Korean financial watchdogs surge into law firms, financial sector

[Photo by Kim Ho-young]

Over 10 retirees from South Korea’s Financial Supervisory Service (FSS) have joined the nation’s largest law firm, Kim & Chang, in the last three years. This trend of reemployment is also witnessing an upswing within the financial sector.

FSS data shared with National Assembly member Yoon Chang-hyun on Wednesday showed that out of 793 FSS retirees, 207 were assessed by the Government Ethics Committee for their reemployment between 2013 and June of this year, with 190 receiving approval.

The count of retirees under reemployment review was only two in 2013 and three in 2014. However, these figures surged to 40 in 2021, 35 in 2022, and 28 in the first half of this year alone.

Under the Public Service Ethics Act, employees of the FSS in the fourth grade or above are, in principle, prohibited from reemployment at financial companies for three years from the date of retirement. However, it is possible if there is no relevance between the work performed in the five years prior to retirement and responsibilities at the institution where the employee is seeking employment.

Kim & Chang had the largest number of reemployed FSS retirees at 11 between 2020 and 2022.

Other organizations with a high number of reemployed FSS officials over a 10-year period include Lee & Ko at 8, Financial Security Institute at 5, Bae, Kim & Lee LLC at 4, Yulchon LLC at 4, and Hana Securities Co. at 4.

An increasing number of retirees are particularly moving to financial institutions that are subject to inspection and supervision by the FSS.

Previously, quite a few numbers of retirees transferred to companies, law firms, and non-profit organizations unrelated to the financial sector, but the 22 retirees who were approved for reemployment this year went to banks, financial holding companies, insurers, card companies, securities firms, savings banks, and accounting firms, all supervised by the FSS.

Meanwhile, concerns also rise over the lack of work discipline among the FSS employees.

In April and May this year, six employees were subjected to pay cuts and one suspended for violating employment rules. Another one employee was dismissed for violating the employee code of conduct, including employment rules.

Earlier, Financial Supervisory Service Governor Lee Bok-hyun hosted a workshop on anti-corruption and integrity last month and stressed the need to root out interest cartels in the financial sector.

“We must ensure that that no public misunderstanding happens regarding personal contacts with former FSS officials in financial companies and their reemployment,” Lee said.