President Lee on Government Bond Collusion: "Don't Even Think About Rigging Bids"

KRW 1.6 Trillion Fine for 15 Financial Firms Over Government Bond Auction Collusion
Fair Trade Commission's Largest-Ever Penalty... Seven Firms Referred for Prosecution
President Lee: "No One Can Profit by Breaking the Rules"

President Lee Jae-myung warned 15 financial companies that colluded in government bond auctions, after they were fined more than KRW 1.6 trillion in the largest penalty ever imposed, saying, "Don't even think about colluding in bids again." The remarks underscored his support for the Fair Trade Commission's tough sanctions and reaffirmed a zero-tolerance approach to unfair practices.

President Lee Jae-myung speaks during a Cabinet meeting at Cheong Wa Dae on Nov. 10, 2026. Yonhap News

On X (formerly Twitter) that day, President Lee shared an article about the sanctions for collusion in government bond auctions and wrote, "We are building a Korea where no one can profit by breaking the rules, through the Fair Trade Commission." The post also included the hashtags "A Korea for Me" and "The Lee Jae-myung administration's Fair Trade Commission gets things done."

President Lee's direct promotion of the Fair Trade Commission's enforcement record and strong warning against collusion appear intended to highlight his administration's commitment to establishing fair competition in the market. In particular, his remarks appear to stress the need for strict enforcement of the law, given that collusion in government bond auctions can raise the cost of government borrowing and ultimately increase the burden on the public.

Earlier that day, the Fair Trade Commission announced that it had decided to fine 15 banks and securities firms a total of KRW 1,626,575,000,000 and issue corrective orders for agreeing in advance on interest rates and bid volumes, or exchanging information, during government bond auctions. The fine is the largest ever imposed in a single case, surpassing the KRW 1,031,100,000,000 penalty imposed on Qualcomm for abusing its market-dominant position.

The Fair Trade Commission's investigation found that, in 150 government bond auctions held over roughly three and a half years from January 2020 to June 2023, the financial companies exchanged information on interest rates or coordinated bid rates and volumes in advance. In 145 of those auctions, they reached specific agreements on bid rates and other details.

Investigators also found that some financial companies handed over contact details and operating manuals needed for collusion when the employees responsible for bidding changed.

Taking into account the duration and frequency of the collusion, the Fair Trade Commission decided to refer seven companies to the Serious Crimes Investigation Agency: Mirae Asset Securities, NH Investment & Securities, Industrial Bank of Korea, KB Securities, Kiwoom Securities, Korea Development Bank, and Korea Investment & Securities.

The sanctions are significant because they hold companies accountable for undermining competitive bidding in the government bond market, where the state raises funds. The more financial companies compete to purchase government bonds at lower interest rates, the less the government pays in interest. But when collusion drives up winning bid rates, the resulting burden is ultimately passed on to public finances.

The previous day, President Lee also pledged stern measures, including criminal punishment and the cancellation of housing lottery wins, after 354 suspected cases of fraudulent apartment subscriptions were uncovered. He said, "I will make sure we build a common-sense country where no one can profit by breaking the rules or suffer for following them." His remarks marked the second consecutive day he had spoken out against unfair practices, following suspected collusion in housing subscriptions and now government bond auctions.

The financial companies targeted by the sanctions, however, are pushing back, calling them excessive and arguing that they fail to account for the special nature of their role in supporting liquidity in the government bond market. With some reportedly considering legal action, including administrative lawsuits, a legal battle over the appropriateness of the record-setting fines is also expected.

This content was produced with the assistance of AI translation services.