Analyst Who Bought Stocks Before Report Release Denies Charges in First Trial

"Report's Impact on Stock Price Unclear... Provided Information Already Public"

[Asia Economy Reporter Yoo Byung-don] A securities firm analyst accused of writing favorable corporate reports on stocks held under borrowed names, then selling the stocks after their prices rose to pocket several hundred million won, denied the charges at the first trial.

The Criminal Division 12 of the Seoul Southern District Court (Presiding Judge Oh Sang-yong) held the first trial on the 26th for Mr. A (on leave), a researcher at a securities firm's research center, and his accomplice Mr. B, a friend, on charges of violating the Capital Markets Act.

At the trial, the defense attorney argued, "Not all capital gains obtained from stock price increases can be considered unfair profits."

He added, "According to Supreme Court precedents, profits gained from stock price increases due to third-party factors are not unfair profits," and "It has not been clearly established in the indictment how Mr. A's report influenced the stock price."

He further stated, "The prosecution claims that Mr. A 'provided undisclosed insider information to others in the course of his duties,' but it is unclear what that information is," and "The information in question was not undisclosed but had already been made public in the stock market through media reports or external disclosures."

The prosecution countered, "The parts where the defense requested explanations regarding 'unfair profits' are already detailed in the indictment," and "It is understood that the defendant informed his accomplice about the stocks related to his duties and received compensation."

Mr. A was arrested and indicted last month on charges of making a total of 760 million won by having Mr. B purchase certain stocks before writing 'buy' recommendation reports on them from 2015 to 2019, then selling the stocks after the price rose following the report's publication to gain the price difference.

This case attracted attention as the first investigation target of the Financial Supervisory Service's Capital Markets Special Judicial Police (Special Judicial Police), launched in July last year.

This content was produced with the assistance of AI translation services.