FSS "Super Wanggaemi and Edison EV Fast-Track Transferred to Prosecutors... Focusing Resources on Major Cases"

[Asia Economy Reporter Lee Jung-yoon] The Financial Supervisory Service (FSS), which fast-tracked the referral of cases involving so-called Super Wang Gaemi accused of manipulating KOSDAQ-listed stocks for profit, Edison EV whose stock price surged due to an attempted acquisition of Ssangyong Motor, and stock leading chat rooms to the prosecution, has decided to focus its investigative capabilities on serious cases such as financial crimes that harm the public.

On the 1st, the FSS announced this decision and resolved to expand the joint investigation team. Through this, they aim to concentrate investigative resources on serious cases like financial crimes affecting the public and improve investigation processes to strictly punish those disturbing the capital market.

In cases involving Super Wang Gaemi, Edison EV, and stock leading chat rooms, the joint investigation team operated with a selective and focused approach, moving away from the previous first-in-first-out method and one investigator per case system.

A man named Kim, known as Super Wang Gaemi, is suspected of gaining approximately 4.6 billion KRW in illicit profits through unfair trading activities last July. Kim and a related party, Mr. A, reportedly purchased 1,085,248 shares (12.09%) of metal processing company Shinjin SM in June last year and July this year, and after the stock price rose, sold all shares to earn a total profit of 1.11964 billion KRW. Additionally, the FSS designated the investigation into Edison EV, whose stock price surged following the announcement of its entry into the Ssangyong Motor acquisition battle, as a fast-track case and referred it to the Seoul Southern District Prosecutors' Office. The fast-track system allows skipping the review by the Capital Market Investigation Deliberation Committee (CMIDC) and the Securities and Futures Commission (SFC) under the Financial Services Commission when rapid action is necessary, enabling referral to investigative agencies by the SFC chairman's decision.

The FSS will first completely overhaul the investigation process into three stages: acceptance, commencement, and investigation. At the acceptance stage, cases will be bifurcated into 'serious cases' and 'general cases' based on importance and other factors. At the commencement stage, criteria will be revised to prioritize serious cases. During the investigation stage, resources will be allocated to serious cases for priority handling, and investigation methods will be diversified according to the characteristics of each case. Furthermore, the special joint investigation team will be expanded, and general cases will be swiftly handled by focusing on matters with high suspicion. The FSS plans to implement these changes within the fourth quarter of this year.

Moreover, the FSS intends to support enhancing the disclosure capabilities of listed companies. The 'Visiting Corporate Disclosure Briefings,' which were suspended after the COVID-19 outbreak, will be resumed in Busan, Daejeon, and Pangyo in Seongnam, Gyeonggi Province, and from next year, nationwide disclosure briefings will be held in the four major metropolitan areas. Additionally, they will regularly publish casebooks on securities registration statement amendment requests and strengthen communication by notifying underwriters and disclosure officers of listed companies about review schedules in advance.

The FSS also announced that it will formalize the accounting audit period and fully guarantee the defense rights of those under investigation. Previously, there were no regulations limiting the audit and investigation period, but it will now be limited to one year in principle, with extensions of six months possible upon approval by the FSS governor in unavoidable circumstances. Furthermore, the previous method, which allowed access to the Q&A documents only after prior notification of the FSS's corrective actions, will be improved so that the investigated party can view and copy the Q&A documents immediately after receiving the questionnaire before prior notification. This will guarantee approximately two weeks more for exercising defense rights compared to before.

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