Trading Stocks in Advance Using Non-Public Information Before Disclosure... Exchange Announces Market Surveillance Results

Politicians, Lithium, Digital Currency, and Related Stocks Especially Fervent

[Asia Economy Reporter Minwoo Lee] According to an investigation by the Korea Exchange, unfair trading practices such as disposing of stocks in advance using undisclosed internal information before adverse disclosures continued to be rampant last week (March 8?12). As the stock prices of politically related theme stocks, digital currency, and lithium-related stocks increased, the number of market alert measures also rose by more than 23% compared to the previous week.

On the 17th, the Exchange's Market Surveillance Committee announced a "Market Surveillance Weekly Brief" containing these details. According to the committee, six additional cases involving suspicious trading of pharmaceutical and semiconductor-related stocks were detected last week. This brought the total number of monitored stocks to 31.

According to the committee's investigation, in the case of Company A, a suspect (one account) presumed to have received undisclosed information (securing liquidity) purchased the company's stocks intensively before the disclosure. Multiple suspects who knew in advance about a subsidiary contract of Company B also bought stocks intensively before the disclosure. Suspects (two accounts) presumed to have received adverse undisclosed information indicating a decline in the sustainability of Company C's operations sold these stocks intensively before the disclosure. The committee plans to notify supervisory authorities after further review of these stocks.

The number of market alert measures increased by about 23% to 48 cases from 39 cases the previous week. A total of 41 cases were designated as investment caution stocks, including eight stocks with a surge in spam message reports and four stocks where a small number of accounts were excessively involved in purchases, up by four cases from 37 the previous week. Seven cases, including five stocks that surged as politically related theme stocks, were designated as investment warning stocks, more than tripling from two cases the previous week.

Preventive measures were taken against 59 accounts that showed potential for unfair trading, such as manipulating expected execution prices or market prices, or excessively repeating order corrections and cancellations. This represents an increase of about 40.5% from 42 cases the previous week.

These accounts were involved in price increases by repeatedly executing high-priced buy orders in the late trading session using multiple accounts by the same individual. Additionally, cases were detected where large low-priced buy orders were submitted in low-liquidity stocks to create a false impression of strong buying demand, followed by repeated order corrections and cancellations as the market price approached the order price.

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