The Seoul Southern District Prosecutors' Office's joint financial and securities crimes unit — widely known in legal circles as the "Grim Reaper of Yeouido" for its aggressive pursuit of market manipulation and other financial crimes — appears unlikely to survive the sweeping changes to the Criminal Procedure Act set to take effect in October. Despite a track record that earned the unit recognition from President Lee Jae-myung, who has repeatedly warned that stock price manipulation will bring financial ruin to those involved, the unit faces effective dissolution once prosecutors lose their investigative authority under the revised law. The Supreme Prosecutors' Office has acknowledged that operating the unit in its current form will be all but impossible, and legal experts are raising serious concerns about the country's capacity to combat increasingly sophisticated financial and securities crimes.
Responding to questions Wednesday, the Supreme Prosecutors' Office said that under the revised legal framework, "prosecutors will only be able to review warrants, decide whether to indict, and provide advisory opinions when investigative agencies request them." It added that mutual secondment restrictions under the Public Prosecution Office Act and the Serious Crimes Investigation Agency Act "will impose significant constraints on operating the Seoul Southern District Prosecutors' Office's joint financial and securities crimes unit in its current form."
The Supreme Prosecutors' Office added that after the revised law takes effect, it "will do its utmost to ensure there is no gap in responding to financial crimes by accurately filing charges and rigorously maintaining prosecutions when relevant cases are referred by the Serious Crimes Investigation Agency, special judicial police and other investigative agencies."
In October, the current prosecution service will be abolished and replaced by two new bodies: the Serious Crimes Investigation Agency, which will handle investigations, and the Public Prosecution Office, which will handle indictments and the maintenance of prosecutions. In line with that restructuring, the Democratic Party of Korea-led ruling party recently pushed through a revision to the Criminal Procedure Act that strips prosecutors of all investigative authority. Going forward, prosecutors will be barred not only from initiating their own investigations but also from conducting supplementary investigations into cases referred by police, the Serious Crimes Investigation Agency and other investigative bodies. The Supreme Prosecutors' Office sees the unit's continued operation in its current form as untenable once prosecutors' investigative powers disappear entirely.
The Seoul Southern District Prosecutors' Office's joint financial and securities crimes unit built its reputation by pooling specialist personnel from the Financial Services Commission, the National Tax Service, the Financial Supervisory Service, the Korea Exchange and the Korea Deposit Insurance Corporation alongside prosecutors, effectively offering a one-stop service for investigating financial and securities crimes. Its predecessor, the securities crimes joint investigation team, earned the "Grim Reaper of Yeouido" moniker by cracking down hard on stock price manipulators and other offenders in the Yeouido financial district.
The securities crimes joint investigation team was established at the Seoul Central District Prosecutors' Office in 2013, then relocated to the Seoul Southern District Prosecutors' Office in February the following year as part of an initiative to develop it into a specialized hub for financial and securities crime. The team introduced a fast-track system that allowed prosecutors to launch immediate investigations into major cases requiring swift intervention — including search and seizure operations — without waiting for a prior probe by the Financial Supervisory Service or other agencies, and the approach delivered results.
The unit was abruptly dissolved in January 2020, shortly after Choo Mi-ae took office as justice minister under the Moon Jae-in administration, in line with a policy to curtail prosecutors' direct investigative role. The team had until then operated as an unofficial unit outside the formal organizational chart. Amid growing concern about a resulting gap in financial and securities crime enforcement, it was reconstituted in September 2021 at the Seoul Southern District Prosecutors' Office in a reduced form as a financial and securities crime investigation cooperation team.
That cooperation team, which excluded direct prosecutorial investigation, was widely criticized for being less efficient and less agile than its predecessor. After the Yoon Suk Yeol administration took office, then-Justice Minister Han Dong-hoon — now a National Assembly member — revived it in May 2022 as a joint financial and securities crimes investigation team. It was formally incorporated into the office's organizational structure in May 2023 as the joint financial and securities crimes unit. Among its recent cases, the unit in June indicted a group of suspects accused of exploiting the secondary battery investment boom — allegedly acquiring a Kosdaq-listed company with no capital through repeated false disclosures and breach-of-trust transactions worth hundreds of billions of won, then spreading plans for a 60 billion won rights offering that drove the share price up 900 percent before the company was ultimately delisted.
The prospect of the "Grim Reaper of Yeouido" being wound down has prompted serious concern in legal circles about a regression in the country's capacity to investigate increasingly sophisticated financial and securities crimes. A lawyer who previously served as a senior prosecutor said "the prosecutor's role is to design and direct the course of cooperation with related agencies such as the Financial Supervisory Service — what role can a prosecutor without investigative authority possibly play?" The lawyer added that "in the long run, if prosecutors have never conducted investigations and lack investigative skills, they will not even be able to provide advisory opinions."
Once the revised Criminal Procedure Act takes effect, prosecutors will also lose their authority to direct special judicial police investigations. On that issue, the Supreme Prosecutors' Office said the matter "concerns legislation passed by the National Assembly" and that it "will work closely with relevant agencies to prepare all necessary measures to the greatest extent possible, so that no gap in financial crime enforcement arises during the transition."
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