Son Byung-du, Chairman of Korea Exchange, Appears Before Political Affairs Committee Regarding SG-Related Stock Plunge

Chairman Kim Geun-ik of the Poetry Review Committee Also Attends

[Image source=Yonhap News]

Son Byung-doo, Chairman of the Korea Exchange, and Kim Geun-ik, Chairman of the Market Surveillance Committee, will attend the full meeting of the National Assembly's Political Affairs Committee on the 11th. They were summoned by the National Assembly following criticism that the Korea Exchange's market surveillance function did not operate properly during the stock price crash triggered by Societe Generale (SG).

According to the Korea Exchange on the 10th, Chairman Son and Chairman Kim will appear at the full meeting of the Political Affairs Committee tomorrow.

The Korea Exchange Market Surveillance Committee monitors unfair trading activities occurring in the domestic stock market and reports to financial authorities when abnormal transactions occur.

The Market Surveillance Committee automatically detects abnormal stock price or trading volume fluctuations. It is known to identify about 70% of stock price manipulation crimes first at the Korea Exchange. When detecting insider trading, market manipulation, fraudulent transactions, or market order disturbances, it requests disclosure inquiries or initiates investigations. Cases violating relevant laws are reported to the Financial Services Commission.

The controversy surrounding the SG-triggered stock price manipulation allegations arose on April 24, when a flood of sell orders for eight stocks (Samchully, Daou Data, Harim Holdings, Seoul Gas, Daesung Holdings, Seonkang, Sebang, Daol Investment Securities) came from SG Securities accounts.

These eight stocks are suspected to have been involved in collusive trading through Contracts for Difference (CFD) accounts. CFDs are a trading method aimed at profiting from price fluctuations of underlying assets. Since actual investment products like stocks are not held, anonymous trading is possible, raising concerns that CFDs can be used for stock price manipulation.

An exchange official explained, "Due to the anonymous trading characteristics of CFD accounts, IP addresses cannot be viewed, and it is difficult to identify stock trading patterns," adding, "We plan to discuss improvements to the CFD system together with the Financial Services Commission."

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