Stock Manipulation Involving Celebrities... Perpetrators Disappear Amid Multi-Level Scheme

On the 24th, the domestic stock market was shaken due to a massive sell-off by the foreign securities firm SG Securities. A total of eight stocks hit the lower price limit, including Seongwang, Harim Holdings, Sebang, Samchully, Daesung Holdings, Seoul Gas, Daol Investment & Securities, and Dow Data. The market capitalization of these stocks disappeared by approximately 7.39 trillion won from the 24th to the 26th.

The financial authorities detected signs of stock price manipulation and launched an investigation. They judged that not only the massive sell-off but also the process of the stock price rising involved collusive trading, where investors bought and sold stocks at predetermined prices. The Joint Financial and Securities Crime Investigation Team of the Seoul Southern District Prosecutors' Office imposed a travel ban on 10 suspects believed to be involved in the stock price manipulation. Additionally, the prosecution, the Financial Services Commission, and the Financial Supervisory Service formed a joint investigation team for the SG-triggered stock price crash.

Attention naturally turned to the suspected manipulators. The first person named was singer Lim Chang-jung. It was reported that Lim invested about 3 billion won in H Investment Advisory Firm, which is known to have led the stock price manipulation. He was also reported to have attended a party hosted last year by Ra Deok-yeon, the CEO of H firm. Singer Park Hye-kyung was also found to have invested money in a management company related to H firm.

However, Lim claims he is a victim. His side stated that he suffered losses of tens of billions of won and referred to himself as a victim. They also admitted attending the party but insisted it was only because Ra invited him, denying any connection to stock price manipulation. Park also claimed she suffered a loss of 40 million won. Not only them, but even CEO Ra claimed to be a victim. In a media interview, Ra said, "The stocks I managed are related to the current situation, but they are only a part of it," adding, "I also lost about 40 to 50 billion won within a week."

Lim Chang-jung, Ra Deok-yeon: "I am also a victim"... Punishment Possible if Illegal Investment Was Known

[Image source=Yonhap News]

However, regardless of whether one is a victim, if it was known in advance that H firm's investment method was close to illegal, it could constitute a violation of the Capital Markets Act. If someone recommended the investment to others, it is essentially equivalent to a pyramid scheme fraud. The method of attracting investors initially yields profits but later causes losses, which still counts as fraud. According to current law, even if one did not recognize the pyramid scheme but attracted investment funds, they are considered an intermediary in the pyramid scheme and subject to punishment. The recent SG-triggered stock price crash is also known to have involved firms spreading like an octopus, attracting investment funds in this manner.

Meanwhile, the police are analyzing about 200 mobile phones presumed to have been used by industry insiders related to the SG-triggered stock price crash. The police conducted a search and seizure at an office located in Samseong-dong, Gangnam-gu, Seoul, and booked one person on charges of violating the Capital Markets Act. The firm in question is known to be an unregistered investment advisory firm.

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