'COVID-19 Kit FDA Approval'... Group Arrested for Stock Manipulation Using False Information

[Asia Economy Reporter Yoo Byung-don] The prosecution has launched an investigation after detecting signs of organized stock price manipulation targeting companies related to COVID-19 diagnostic kits and therapeutics.

The Seoul Southern District Prosecutors' Office Financial and Securities Crime Joint Investigation Team (Chief Dan Sung-han) announced on the 4th that it has arrested two executives of Company A, listed on the KOSDAQ, on charges including fraudulent unfair trading.

According to the prosecution, in August 2020, Company A announced that its COVID-19 diagnostic kit had received approval from the U.S. Food and Drug Administration (FDA) and revealed plans for kit export and production. Subsequently, Company A's stock price soared from the 1,300 won range to over 9,000 won within 17 trading days.

However, it was revealed that Company A's announcement was exaggerated or inaccurate. The executives are suspected of deliberately inflating the stock price by disseminating false and exaggerated information.

The prosecution is also investigating the possibility that a group systematically manipulated stock prices, based on the fact that companies B and C, also listed on the KOSDAQ, experienced rapid stock price increases around the same time, fueled by favorable news such as diagnostic kit development and clinical trials of therapeutics.

In particular, the investigation is focusing on Mr. Kim, who was involved in all three companies through management participation or capital investment. Recently, the prosecution conducted search and seizure operations at Mr. Kim's residence and the three companies. It is reported that Mr. Kim has a prior record of punishment for stock price manipulation in 2011 alongside former Ssangbangwool Group Chairman Kim Sung-tae.

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