Party and Government "Up to Double Recovery of Illicit Gains from Stock Price Manipulation Crimes"

Discussion on Measures to Prevent Recurrence of Stock Market Crash
Strengthening Market Surveillance System

The People Power Party and the government have decided to strengthen punishments, including recovering up to twice the amount of unfair profits gained through stock price manipulation, to prevent recurrence of the recent stock price crash caused by SG Securities.

On the afternoon of the 9th, Park Dae-chul, the Policy Committee Chair of the People Power Party, met with reporters after the 'Party-Government Council on Investigating the Causes of the Large-scale Stock Price Crash and Measures to Prevent Recurrence' held at the National Assembly. He stated, "The party and government share the recognition that the recent stock price crash undermines trust in the capital market and can significantly dampen investment activities, so all policy efforts must be devoted to building a stock market where investors can invest with confidence."

Attendees at the party-government council included Kim Ju-hyun, Chairman of the Financial Services Commission, Ham Yong-il, Vice Chairman of the Financial Supervisory Service, and Shin Ja-yong, Director of the Prosecution Bureau at the Ministry of Justice.

Park Dae-chul, Chairman of the Policy Committee of the People Power Party, is giving an opening remark at the party-government council meeting on the causes of the large-scale stock market crash and measures to prevent recurrence, held at the National Assembly in Yeouido, Seoul on the 9th. Photo by Hyunmin Kim kimhyun81@

Regarding stock price manipulation crimes, the level of punishment and sanctions will be increased. Policy Committee Chair Park said, "In addition to existing criminal penalties, we have decided to promptly amend the Capital Markets Act to introduce a system of fines that recover up to twice the amount of unfair profits," and emphasized, "We will also swiftly push for amendments to the Capital Markets Act to restrict capital market transactions for 10 years and limit the appointment of executives in listed companies upon detection of stock price manipulation."

He added, "The purpose is to eradicate securities crimes by imposing severe punishments that are difficult to recover from once securities crimes are committed."

The market surveillance system that detects abnormal transactions will also be significantly reinforced. Policy Committee Chair Park explained, "The Korea Exchange's abnormal transaction detection system is currently designed mainly to detect typical crimes within a short period of less than 100 days, but going forward, it will be improved to detect new and atypical methods such as multi-level investment solicitation and medium- to long-term price manipulation over six months or one year," and added, "Once the system is established, we will also review past transaction cases for stock price manipulation."

In addition, the financial authorities will strengthen their information collection functions and improve reward and voluntary reporting systems. Policy Committee Chair Park said, "We will collect and analyze information from YouTube and rumors, and sufficiently reinforce related personnel," and added, "Furthermore, the reward limit will be increased from the current maximum of 2 billion KRW to 4 billion KRW, and by promptly processing the pending Capital Markets Act, we will introduce a mitigation system for voluntary reporters to encourage active reporting and tips from the public."

Currently, the Joint Investigation Team for Financial and Securities Crimes at the Seoul Southern District Prosecutors' Office operates as a temporary dispatched unit, but it is scheduled to be formalized and converted into a permanent unit within this month. Director Shin said, "Once formalized, it cannot be unilaterally abolished, allowing for stable organizational operation. Members will be able to focus on their work in a stable system, and cooperation with related agencies will be much faster and more efficient."

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