Buildings of the capital's financial district in Yeouido, Seoul / gettyimagesbank

Securities firms in Korea are facing criticism for their lack of attention to protecting individual investors, despite achieving strong performances in the first half of the year thanks to increased trading volume by these investors in U.S. stocks.

Despite their positive results, some firms have rather reduced deposit usage fees paid to customers in the first half. Furthermore, they appear to have shirked responsibility for financial losses caused by abrupt cancellation of daytime trading for U.S. stocks.

Korea Investment & Securities recorded a net profit of 710.9 billion won ($534 million) in the first half of the year, a 64.9 percent increase from a year earlier, securing the top position in the industry.

NH Investment & Securities saw a 15.2 percent increase in its net profit, reaching 422.7 billion won, while Samsung Securities and KB Securities also experienced 26.4 percent and 50.4 percent growth in their net profits, respectively.

Their strong performance is attributed to a significant increase in stock trading fees, especially overseas due to a rush among domestic investors to trade U.S. stocks.

While the industry enjoyed strong performances, no firms raised their deposit usage fees, and some securities firms — including KB Securities, Shinhan Securities and DB Financial Investment — lowered their deposit usage fee rates in April and May, citing the decline in market interest rates or the anticipated reduction in the benchmark interest rate.

Criticisms have also been raised over the negligence of investor protection as a total of 19 securities firms here have suspended daytime trading of U.S. stocks following the cancellation of orders by the U.S. overnight trading platform operator Blue Ocean.

On Aug. 5, the alternative trading system in the United States, which provides after-hours trading, abruptly notified the brokerages of the cancellation of all orders placed by Korean investors after 2:45 p.m. Korean time, citing an unexpected surge in trade volume.

According to the Financial Supervisory Service, the country's financial watchdog, the incident caused the cancellation of orders worth 630 billion won ($473 million) from about 90,000 accounts here, with all gains and losses nullified.

Then, investors' accounts in some brokerages were not restored even after the regular market opened, resulting in a failure to trade in a timely manner during the period of market volatility.

In response to investors' complaints, one of the brokerages said, "Foreign stocks can be subject to trading suspensions without prior notice due to local conditions. Such trading risks are announced in advance, and disruptions caused by overseas exchanges are not covered under compensation clauses in the terms and conditions."

Affected investors claimed that the brokerages, which have eagerly promoted their offering of daytime trading of U.S. stocks and have earned trading fees, are now acting as if they are not responsible.

Amid growing controversy, the brokerages said last Wednesday via the Korea Financial Investment Association, "The decision to resume the service will be made after thoroughly validating the system stability of Blue Ocean."