Blowing the whistle in South Korea: Hyundai Man takes on chaebol culture

South Korean engineer Kim Gwang-ho flew 7,000 miles to Washington last year to do something he never dreamed he would: he reported alleged safety lapses at Hyundai Motor Co - his employer of 26 years - to U.S. regulators.

Citing an internal report from Hyundai's quality strategy team to management, Kim told the U.S. National Highway Traffic Safety Administration (NHTSA) the company was not taking enough action to address an engine fault that increased the risk of crashes.

Hyundai denies the allegations. The company promotes openness and transparency in all safety-related operations, and its decisions on recalls comply with both global regulators and stringent internal processes, Hyundai told Reuters in an emailed statement.

Reuters was unable to review the internal report cited by Kim due to a court injunction filed by Hyundai.

In a culture which values corporate loyalty, Kim was moving against the tide when he handed the NHTSA 250 pages of internal documents on the alleged defect and nine other faults.

South Korea has been buffeted by corporate scandals, many within its family-run conglomerates or chaebol, but has seen few whistleblowers. A high proportion are sacked or ostracized, despite legislation to protect them, according to advocacy groups. read more »

Law Firm Partner and Neighbor Charged in $1 Million Insider Trading Scheme

The Securities and Exchange Commission today charged a former partner at an international law firm and his neighbor with making more than $1 million in illicit profits by insider trading around corporate announcements.

The SEC alleges that Walter C. Little accessed confidential documents on his law firm’s internal computer network related to at least 11 impending announcements involving law firm clients, none of which he personally advised or billed for services.  Little then allegedly traded in advance of each announcement and often tipped his neighbor Andrew M. Berke with material nonpublic information so he could similarly trade in company stocks before the announcements were made publicly.  According to the SEC’s complaint, the insider trading occurred from February 2015 to February 2016. read more »

Former Nomura traders charged with fraud over mortgage securities

Two former traders at Nomura who ran the commercial mortgage-backed securities desk were charged by the Securities and Exchange Commission with deliberating lying to customers to inflate the profits of the desk and themselves. The SEC alleges that James Im and Kee Chan each misrepresented price information while acting as intermediaries on trades with Nomura's customers who sought to buy and sell CMBS on the secondary market. read more »