Shinhan Investment concealed a $95M ETF futures loss for two months with a fake swap book

In August 2024, two traders at Shinhan Investment, the brokerage subsidiary of South Korea's Shinhan Financial Group, took speculative positions in leveraged ETF futures. When the leveraged instruments moved against them, the losses swelled to roughly 130 billion won, close to US$95 million.

Rather than report the loss immediately as regulations require, the two traders concealed it for about two months by recording a fictitious swap trade that appeared to generate a profit. The fabricated 'swap gain' was entered into the books to offset the unpaid futures loss, masking the damage from management and from the parent bank.

The scheme was exposed internally, and Shinhan Investment replaced the two traders involved. The Financial Supervisory Service (FSS), South Korea's financial regulator, investigated after the loss surfaced and issued a business warning to the brokerage in October 2025.

The two staff members were sentenced to three years in prison for the concealment. The case added to a string of Korean brokerages that have struggled with discipline on their proprietary trading desks, and it raised renewed questions about how banks and securities firms manage the risk of leveraged derivative products.