Rhyme Investment Firm's 'Stock Manipulation' Mastermind Sentenced to 12 Years Imprisonment and Fined 180 Billion Won

[Asia Economy Reporter Lee Jung-yoon] A group that manipulated the stock prices of KOSDAQ-listed companies funded by Lime Asset Management (Lime) funds to gain tens of billions of won in illegal profits was sentenced to heavy prison terms in the first trial.

The Criminal Division 12 of the Seoul Southern District Court (Presiding Judge Oh Sang-yong) sentenced Lee Mo to 12 years in prison and a fine of 180 billion won on the 3rd for charges including violation of the Capital Markets Act. Most of the co-defendants who were indicted together were also sentenced to prison terms.

The court explained the sentencing reason, stating, "Lee and others created a false appearance of attracting investment by issuing a large amount of convertible bonds and capital increase after acquiring a listed company without capital," adding, "They pretended to be conducting new business and distributed false press releases to boost stock prices and obtain illegal profits."

Lee and others were prosecuted on charges of acquiring the KOSDAQ-listed auto parts company Esmo through a no-capital merger and acquisition (M&A) via a paper company from July 2017 to March 2018, manipulating the stock price to illegally obtain about 8.3 billion won. They are also accused of repeatedly failing to disclose large stockholding (change) reports. It was investigated that Lime invested more than 10 billion won in the company by purchasing convertible bonds (CB) issued by Esmo.

To boost stock prices, they also attracted foreign politicians and entrepreneurs to draw attention and pretended to be doing business with overseas institutions. They distributed false press releases claiming joint technology development with top-tier companies after signing formal business agreements. When such favorable information spread, they used nominee securities accounts to conduct multiple price manipulation transactions and resold them to gain illegal profits.

Earlier, the prosecution requested a prison term of 15 years and a fine of 200 billion won for Lee, and prison terms of 3 to 10 years for the other co-defendants at the sentencing hearing, stating, "This was an organized crime that disrupted the order of the stock market and ruined listed companies."

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