Financial Supervisory Service Refers Former DS Securities Research Center Head on 'Front-Running' Charges with Indictment Recommendation
[Asia Economy Reporter Koh Hyung-kwang] The Financial Supervisory Service's Capital Market Special Judicial Police (Special Judicial Police) has forwarded former research center head A of a securities firm, who is suspected of front-running, to the prosecution with an indictment opinion. This is the first case in which a detention warrant requested by the FSS Special Judicial Police has been issued.
According to the financial investment industry on the 16th, the FSS Special Judicial Police recently sent A, affiliated with DS Investment Securities, to the prosecution with an indictment opinion on charges of violating the Capital Markets and Financial Investment Business Act. B, who lent his name to allow A to buy and sell stocks, was also forwarded to the prosecution with an indictment opinion.
A is suspected of making illicit gains by trading stocks before releasing corporate analysis reports on certain small and mid-cap stocks. Front-running refers to unfair trading practices where stocks are bought or sold in advance based on insider stock-related information before normal trading occurs, profiting from the price difference.
Earlier, in June, the FSS Special Judicial Police conducted a search and seizure at DS Investment Securities' research center and A's residence, securing related materials. The FSS Special Judicial Police, which focused on investigating A's front-running allegations, applied for detention warrants for A and B on the 5th. Following a pre-detention hearing on the 7th, detention warrants for A and B were issued. This is the first case where a detention warrant requested by the FSS Special Judicial Police has been granted. The prosecution is expected to decide whether to indict A and B after supplementary investigations.
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Launched in July last year, the FSS Special Judicial Police investigates unfair capital market transactions such as market manipulation (stock price manipulation) and insider trading. It handles cases selected as 'fast-track' by the chairman of the Securities and Futures Commission under the Financial Services Commission and referred to the prosecution, specifically those supervised by the Seoul Southern District Prosecutors' Office.
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