SEOUL (Dow Jones)--The South Korean units of Barclays PLC (BCS) and JPMorgan Chase & Co. (JPM) have been warned by regulators for selling currency derivatives that broke local regulations and have been asked to punish the responsible officials.
According to the Financial Supervisory Service, JPMorgan sold high-risk currency options in 2007 that crimped the ability of six companies to effectively hedge against currency volatility, while Barclays sold currency derivatives to three exporting companies between June 2006 and November 2007 which resulted in them incurring losses.
A spokeswoman at JPMorgan's Seoul office said the company has noted "receipt of a minor caution from the FSS." A Barclays official said the company won't comment on the matter.
An FSS spokesman said the warnings won't necessarily lead to the investments banks being punished unless they continuously break local rules.
An official at the financial regulator's banking service division said the moves are the result of regular investigations in 2009 into possible improprieties at banks.
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