SEOUL, Feb. 18 (Yonhap) — Prosecutors on Thursday raided the market watchdog Financial Supervisory Service (FSS) to look into its suspected implication in the unfolding financial fraud scandal involving Lime Asset Management, prosecution officials said.

   Prosecutors and investigators from the Seoul Southern District Prosecutors Office reportedly secured documents and other materials related to Lime Asset during their raid on the FSS building in Yeouido, central Seoul, in the morning, they said.

This file composite photo shows key suspects in the unfolding Lime Asset fund scam, including its former vice president Lee Jong-pil (C). (Yonhap)

Lime Asset, founded in 2012, has been under probe over selling and running fraudulent financial products and subsequent suspension of fund redemption worth an estimated 1.6 trillion won (US$1.44 billion).

The raid was said to be carried out to obtain data on the alleged incomplete sales of Lime Asset funds and their insolvent operations by the company’s former vice president, named Lee Jong-pil, and other executives, they noted.

Officials at the FSC explained the raid came as part of the watchdog agency’s moves to submit Lime-related data as part of cooperation in the prosecutors’ investigation.

In November last year, the prosecution also raided an FSS bureau in charge of overseeing the inspection of securities companies.

Last month, Lee, the hedge fund’s former vice president, was sentenced by a Seoul district court to 15 years in prison. The court found him guilty of deceiving investors by concealing the massive loss the company’s fraudulent fund product was making.

Meanwhile, officials at Woori Bank, which had sold Lime Asset funds, and KB Securities, which provided total return swap loans to Lime, have also been under investigations.

The fraud scandal has roiled the nation since last year and developed into a high-profile lobbying scandal, in which former and incumbent government officials and politicians are implicated.