South Korea ’ s Board of Audit and Inspection ( BAI ) ruled that the Financial Supervisory Commission ( FSC ) did not commit a serious legal infringement regarding the controversy of the FSC ’ s lax supervision in knock in - knock out ( KIKO ) derivatives . “ Mis - selling of KIKO products were partially confirmed during the process of auditing the operation and supervision of the financial supervisory authority between June and July 2009 . To this end , BAI assured that banks employed measures to prevent any further relapses in the future , ” and added , “ However , there were no significant evidences leading to FSC ’ s infringement of the law which prohibited the BAI from conducting a serious audit in that matter . ” In short , the BAI appears to have concluded that FSC did not violate any laws . Early last year , some small - and medium - sized companies claimed that “ KIKO products were sold without warning the buyer on potential risks , ” citing losses generated by KIKO derivatives due to surging foreign exchange rates . Against the backdrop , FSC were blamed for contributing to the mishap . [ written by Si - young Cho , translated by Yen - mi Hong , edited by JYJ ] [ ⓒ Maeil Business Newspaper & mk . co . kr , All rights reserved ]