46 Individuals and 4 Corporations Prosecuted for Unfair Trading Including Stock Investment Using Non-Public Information

[Asia Economy Reporter Park Jihwan] The Securities and Futures Commission under the Financial Services Commission announced on the 30th that it has reported and notified the prosecution of 46 individuals and 4 corporations in connection with unfair trade cases in the first quarter of this year.

The cases reported and notified to the prosecution by the SFC revealed typical examples of unfair trade, such as fraudulent transactions, market manipulation, and violations of insider trading prohibitions.

Cases suspected of fraudulent trading were detected, such as intentionally creating management dispute issues of a company after purchasing a large amount of its listed stocks to drive up the stock price and then making a profit by selling shares. This exploited investors' expectations that stock prices would rise significantly as stock purchases increased during the management dispute process.

Market manipulation activities were also observed. To facilitate capital increases and convertible bond issuances by raising stock prices, manipulative orders were concentrated around the timing of favorable disclosures, artificially driving up stock prices. Various trading methods were used in this process, including prearranged trading where parties colluded to buy and sell, high-priced buying by repeatedly submitting prices higher than the previous price, and opening/closing price-influencing buying that raised expected transaction prices during the opening and closing price determination periods.

Cases of insider trading were also uncovered, where individuals gained unfair profits by purchasing large amounts of stocks before the public disclosure of a company's capital increase information they had learned in advance. According to the Capital Markets Act, even if insider information is electronically disclosed, it is considered non-public information if three hours have not passed since the disclosure.

The SFC discloses major enforcement cases quarterly to prevent damage to participants in the capital market.

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