Key points
- A civic group filed a criminal complaint against President Lee Jae-myung and three officials with Seoul police on August 3.
- A separate complaint that day named only presidential policy chief Kim Yong-beom, over a January remark about Nasdaq rules.
- The complaints followed funeral wreaths investors sent to the National Assembly on July 29, and a Citi estimate that leverage ETF losses reached 56.3 trillion won ($38.7 billion USD).
- A separate petition to impeach Lee, open since June 26 over his trials and conduct, passed 500,000 signatures on July 9, before the market's worst days.
On August 3, a conservative civic group called the Committee for Common Citizens' Livelihood Measures (서민민생대책위원회) submitted a criminal complaint to the Seoul Metropolitan Police Agency naming President Lee Jae-myung along with policy chief Kim Yong-beom, Financial Supervisory Service governor Lee Chan-jin, and Financial Services Commission chairman Lee Eok-won. The group's allegation is abuse of authority and obstruction of the public's rights, tied to how Korea's single-stock leverage ETFs were approved in the first place.
A second complaint landed the same day, filed separately by Lee Jong-bae, a former Seoul city councilman with the opposition People Power Party. His complaint, sent to the Supreme Prosecutors' Office through the National Petition Portal, names only Kim Yong-beom, alleging abuse of authority, coercion, and obstruction of business through intimidation. It points to one remark. In a January interview, Kim was quoted asking why Korea should block something the Nasdaq already allows.
"Why can't we do domestically what's possible on Nasdaq?" Kim said, according to the complaint.
Lee Jong-bae argues that comment pushed financial regulators to fast-track the single-stock leverage funds ahead of the June 3 local elections, over warnings the Financial Supervisory Service had already raised. Neither complaint is an impeachment. Both go to police and prosecutors as an accusation against named officials, not to the National Assembly as a motion, and it is now up to investigators whether either becomes an actual case.
The complaints followed five days after investors sent about 30 funeral wreaths to the National Assembly, part of a wider reckoning over how badly the leverage funds on Samsung Electronics and SK Hynix had gone. Citi later put a number on the damage, estimating Korean retail losses on leverage ETFs at 56.3 trillion won ($38.7 billion USD), with SK Hynix-linked funds taking the biggest share of the decline.
Lee Eok-won answered for the government that same week. Asked what more regulators would do, he said additional limits were still on the table.
"If necessary, we will consider various methods, including raising the minimum deposit requirement further," Lee said, adding that cutting how much leverage the funds could offer would help moderate volatility.
This isn't the first time Lee Jae-myung's own words have followed a crash. He called the market "unstable" in mid-July, and the Kospi fell again two days later. By August, some of that anger had a named target and a police case number.
A separate petition, for separate reasons
There is also a real impeachment petition, and conflating it with the ETF anger is the easy mistake to make right now. It has nothing to do with the leverage funds. Filed through the National Assembly's public petition system on June 26, weeks before the crash's worst weeks, it cites Lee's ongoing criminal trials, alleged abuse of power, and public comments the petition says damaged national unity and crossed into judicial matters still before the courts.
The petition needed 50,000 signatures within 30 days to be referred to a standing committee. It passed that within two days. By June 29 it had about 180,000 names, and on July 9 it crossed 500,000. A committee referral is a procedural step, a formal signal that a large number of citizens want the matter reviewed. It is not a vote to remove him, and reaching it says nothing about whether the National Assembly will act.
The market underneath all of this hasn't settled. The Kospi fell 5.12% on August 3, then 4.58% more on August 6, then another 0.60% on August 7 to close at 6,258.77, still about 26% below where the index started July. Where the anger lands next is unclear. The wreaths and the complaints go after the leverage funds and the officials who approved them. The petition that could actually remove Lee from office is the one that has nothing to do with either.
Sources
- 머니투데이, "개미 돈 56조 사라져" 레버리지 ETF 비극…바닥은 아직 모른다는데, on Citi's loss estimate
- 서울경제, 단일종목 레버리지 ETF 책임론 확산...김용범 靑정책실장 등 잇단 피고발, on the two August 3 criminal complaints
- 펜앤드마이크, "이재명 탄핵해 주세요" 국회 국민동의 청원, 공개 사흘만에 18만 명 동의, on the impeachment petition's grounds and signature count
- Our earlier coverage: the July 29 funeral wreath protest and forced selling and the August 3 Kospi selloff
Cover photo: President Lee Jae-myung. The White House, public domain.
Won figures are converted at 1,416 won to the dollar, the August 7, 2026 rate, except Citi's estimate, which is converted as originally reported. Quotes are translated from Korean. This article is for information only and is not investment advice.
