Prosecutors Indict Group Selling Unregistered Stock Programs Using High-Profit Bait
Eight Individuals Including Seller A Indicted
![[Image source=Yonhap News]](http://www.asiae.co.kr/news/img_view.htm?img=2020040716004764021_1586242847.jpg)
[Asia Economy Reporter Oh Gyumin] Nine individuals have been brought to trial on charges of selling unregistered automated stock trading programs under the pretense of guaranteed high returns and illegally trading using investment funds received from customers.
The Seoul Southern District Prosecutors' Office Financial and Securities Crime Investigation Cooperation Team (Head Park Seonghun) announced on the 25th that they have arrested and indicted Mr. A (38), a seller of the Copy Trading System (CTS), on charges of fraud and violations of the Capital Markets Act. Eight others, including the CEO of the program development company and securities firm employees facing the same charges, were indicted without detention.
They are accused of operating 72.3 billion KRW in investment funds from approximately 5,000 customers without registering the CTS, an automated stock trading program linking leader traders and customers' securities accounts, as a discretionary investment business with the relevant authorities. Additionally, while selling the CTS to investors, they allegedly deceived about 4,000 victims by claiming to have leader traders who graduated from securities firm competitions, embezzling approximately 12 billion KRW in program sales fees. Mr. A is also charged with market manipulation, having placed high-priced purchase orders (225,798 shares) 8,787 times in total using CTS to buy stocks of KOSPI-listed companies in April last year.
Hot Picks Today
As Samsung Falters, Chinese DRAM Surges: CXMT Returns to Profit in Just One Year
- "Most Americans Didn't Want This"... Americans Lose 60 Trillion Won to Soaring Fuel Costs
- Man in His 30s Dies After Assaulting Father and Falling from Yongin Apartment
- Samsung Union Member Sparks Controversy With Telegram Post: "Let's Push KOSPI Down to 5,000"
- "Why Make Things Like This?" Foreign Media Highlights Bizarre Phenomenon Spreading in Korea
The prosecution stated, “They exploited the nature of non-face-to-face sales, where customers cannot directly verify important contract details such as the existence, experience, and qualifications of leader traders, to embezzle damages amounting to 12 billion KRW and gain enormous profits.” They added, “We confirmed that even securities firm employees were involved, operating funds worth around 70 billion KRW while evading financial supervisory authorities’ scrutiny and committing market manipulation crimes, thereby passing losses onto investors.”
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
