KakaoTalk Signal Room, an Unlicensed Advisor, and a PB's Side Payment

Choi - unregistered investment advisory (무인가 투자자문업). Investment advisory business means giving advice on the value of financial investment products or on investment judgement, by document, word of mouth or electronic media, to an unspecified number of persons, for compensation. Choi supplies specific, repeated buy/sell levels to 1,400 paying subscribers - this is not neutral information or education. Offering advisory services without FSC registration is a criminal violation carrying imprisonment or fines, and the subscription contracts are exposed to invalidity claims.

Boundary checks:

• Advisory vs. information. Generic market commentary or a purely factual news feed can fall outside the licence; named entry/exit prices cannot.
• Advisory vs. discretionary (투자일임업). If Choi ever places orders or tells members how much to trade so that he effectively directs the account, the activity crosses into discretionary management - a separate, higher-capital, separately registered business.
• Solicitation on behalf (투자권유대행). If Choi were paid by a firm to steer clients to its products, that is a third regulated category requiring its own registration and the firm's authorisation.

Lee's separate violations:

1. Receiving undisclosed money from a third party in connection with his duties - a conflict of interest and an integrity breach exposing him to personal sanctions and criminal liability.
2. Disclosing client order and account information without consent - breach of confidentiality and of the firm's data-handling controls.
3. Actively helping an unlicensed advisor by feeding him sizing data, which puts the firm at risk of being treated as an aider of the unregistered business, and by processing orders that are in substance Choi's rather than the client's.

Liability analysis:

• Lee personally. Misappropriation of undisclosed compensation, breach of confidentiality and of the internal-control standards he signed; grounds for suspension, disciplinary action, restitution of the 30% share, and reporting to the authority. His private profit is his own liability, not the firm's.
• The firm. It is not automatically liable for a client's own trading decision, and executing a client's order is not a breach. Its exposure is supervisory: an employee ran an undisclosed side arrangement for months inside a derivatives account, which points to a failure of the internal-control and conflict-monitoring system - itself a sanctionable matter. Civil exposure arises if the client can show the firm's employee induced the trade or concealed Choi's unlicensed status; employer liability for an employee's tort is fact-specific and depends on whether the conduct fell within the scope of employment.
• Quantum. The 23 million KRW loss came from a leveraged short that Yoon chose to take; the firm's defence is that the order was her instruction. The realistic settlement zone is the portion attributable to Lee's concealment and information leakage, not the whole loss.

Immediate actions:

1. Suspend Lee's client contact and trading authority; preserve chat logs, order records, recordings and payment records.
2. Investigate the scale - how many clients, how long, how much money.
3. Report internally and to the supervisory authority under the firm's incident-reporting duty; file a complaint regarding Choi's unregistered advisory.
4. Write to all affected clients disclosing the conflict, and warn Yoon in writing that Choi is unlicensed.
5. Consider voluntary compensation for documented, caused losses, with a signed settlement.
6. Remediate: conflict-of-interest attestations, monitoring of employee external payments, and a control that flags accounts whose orders mirror a third-party feed.

Yes, in principle - with a firewall. A client may use any information she likes; the firm's obligation is not to police her reading list. But the firm must not itself become part of the unlicensed advisory chain.

Conditions:

1. Orders must come from Yoon, in her own name, with her own instruction. Lee may not relay Choi's message as an instruction, and may not exercise any discretion over size, timing or product. If the firm starts translating signals into orders, it is running unregistered discretionary management.
2. Written warning on file. State that Choi is unlicensed, that the firm does not endorse or verify the signals, and that leveraged futures positions can lose more than the margin posted. Record Yoon's acknowledgement and her refusal to stop.
3. No facilitation. Lee may not pass order fills, account size, positions or any client data to Choi - that is both confidentiality breach and direct support for the unlicensed business. Any such request must be refused and reported.
4. Suitability still applies to each recommendation the firm makes. If Lee suggests the trade or adjusts it, the full suitability and disclosure process re-engages.
5. Margin discipline. Because the strategy is high-turnover and stop-loss-free, the firm applies its normal margin-call and forced-liquidation rules without forbearance; no informal waivers.
6. Monitoring flag. The account is tagged so compliance can review order patterns against the signal-room timestamps, and Lee is removed from the account while the investigation runs.

If Yoon cannot accept these conditions - for example if she insists that Lee simply execute Choi's messages without her own review - the firm should decline to continue as the execution channel and document the refusal.