Prosecutors said Monday they have raided seven brokerages for alleged illegal bond trading involving an asset manager at a foreign brokerage firm.
  

The companies are suspected of illegally trading bonds while conspiring with a local unit of Australia-based asset manager Macquarie Funds Group.
  

They are I'M Investment & Securities Co., Kiwoom Securities Co., KTB Investment & Securities Co., HMC Investment Securities Co., Hyundai Securities Co., Shinyoung Securities Co. and Dongbu Securities Co.
  

The Seoul Southern District Prosecutors' Office said it has confiscated evidence that it believes proves a fund manager at Macquarie Investment Management Korea Co. parked bonds worth about 460 billion won ($420 million) at these brokerages.
  

Bond parking is an illegal practice by brokerage houses of delaying the registration of bonds purchased and leaving them to another brokerage temporarily for additional capital gains in anticipation of falling bond prices.
  

The fund manager allegedly inflicted a loss of about 11.3 billion won on an institutional investor after the bond interest rate soared, prosecutors said.
  

They raided Macquarie's office in Seoul and arrested the fund manager for questioning last week.
  

In January, South Korea's top financial regulator imposed a three-month partial business suspension and a fine of 100 million won on Macquarie's Korea unit, formerly known as ING Investment Management Korea, accusing it of parking bonds from 2012 to 2013.
  

The Financial Supervisory Service also penalized the seven brokerages for their involvement in the malpractice with fines of 25 million won to 50 million won. (Yonhap)