Gangnam 'Lower Limit Stock' Recommended by Investment Advisory Firm, Warrant Issued... Investigation Accelerates

A post-seizure search warrant was issued for evidence related to an investment advisory firm that recommended stocks hitting the lower price limit without registering with the Financial Services Commission (FSC). Financial authorities are accelerating investigations, suspecting stock price manipulation in connection with the sharp decline of certain stock items.

On the 27th, the Gangnam Police Station in Seoul announced that a post-seizure search warrant was issued for evidence, including about 200 mobile phones seized from the office of investment advisory firm A on the same day. The police seized evidence at firm A's office located in Samseong-dong, Gangnam-gu, Seoul on the 25th and subsequently applied for the post-seizure search warrant.

The police have previously booked one employee of firm A on charges of violating the Capital Markets Act, suspecting that the firm conducted unregistered discretionary investment management. On the 25th, a disturbance occurred among investors at firm A's office, prompting police to respond to a call.

Financial authorities are also intensifying their investigation. The FSC's Capital Market Investigation Division conducted searches and seizures at firm A's office, related companies registered under associates' names, and residences on the same day. The FSC plans to secure materials through the search and seizure and proceed with questioning the involved parties. The Seoul Southern District Prosecutors' Office's Joint Financial Crime Investigation Team is expected to take over the case once the FSC's investigation concludes. On the 24th, following the FSC's request, the prosecution imposed travel bans on 10 individuals suspected of participating in stock price manipulation.

Financial authorities are reportedly judging that the stock price manipulation groups engaged in prearranged trading. Prearranged trading refers to a method where buyers and sellers agree on prices in advance and trade accordingly, inflating trading volumes.

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