[La Deok-yeon Gate] Main Suspect's Indictment Imminent... Key Issue: Confirming the Core Leader

Detention Period Expires on 28th... Three Main Suspects to Be Indicted
Prosecutors: "Additional Co-conspirators Under Review for Indictment After Further Investigation"

Prosecutors plan to indict three main culprits behind the 'SG Securities-triggered crash' within this week. However, challenges remain, such as identifying the 'key mastermind' among the main perpetrators. After indicting the three members of Ra Deok-yeon’s group, prosecutors are expected to intensify investigations into accomplices and conduct a thorough probe into Contracts for Difference (CFD) trading at Kiwoom Securities and KB Securities.

According to the legal community on the 25th, the Financial Crime Joint Investigation Unit of the Seoul Southern District Prosecutors’ Office (Chief Prosecutor Dan Seong-han) plans to indict Ra Deok-yeon, CEO of Hoan (42), his closest aide Byeon Mo (40), and former professional golfer Ahn Mo (33), who were detained this week. Their detention period expires on the 28th.

The immediate task for prosecutors is to determine who among the apprehended main culprits was the 'number one' leader who centrally orchestrated the crime. A prosecutor stated, "While CEO Ra is a very important figure, it is difficult at this stage to confirm whether he is the number one or number two."

Identifying the number one is crucial to specify the command-execution relationships within the group, which in turn helps distinguish accomplices from victims. So far, CEO Ra is known to have set the overall framework and issued instructions regarding investor recruitment, stock selection, and trading. Byeon, who was also detained, managed employees as the general manager, and Ahn reportedly recruited high-net-worth investors. Those involved in the stock price manipulation reportedly carried out their respective roles during the crime.

[Image source=Yonhap News]

Meanwhile, prosecutors continue investigations to prove collusive trading charges, identify accomplices, and secure criminal proceeds. On the 12th, they conducted a search and seizure at the home and clinic of Joo Mo, a rehabilitation medicine director known to have attracted physician investors. Im Mo, a beauty industry CEO listed as an inside director by CEO Ra, has also been named a suspect.

Prosecutors plan to indict the three main culprits first as their detention period expires this week, but will decide whether to indict other accomplices after further investigation. A prosecutor said, "We are investigating all individuals involved in the crime," adding, "Those in Ra’s organization are likely to face similar charges as the three detained."

Another focus of the prosecution’s investigation is the securities firms. On the 24th, prosecutors raided the headquarters of Kiwoom Securities and KB Securities to secure materials related to CFD trading. CFDs are derivative products that allow leveraged investment up to 2.5 times the margin without owning the underlying stocks, and were central to this incident. Prosecutors suspect that Ra’s group opened CFD accounts under investors’ names and used large-scale leverage to artificially inflate stock prices over a long period.

It is also critical whether prosecutors will summon and launch a full investigation into Kim Ik-rae, former chairman of the Daou Kiwoom Group. CEO Ra has claimed that former Chairman Kim triggered this incident. Prosecutors have so far distanced the recent securities firm raids from direct links to Kim’s alleged involvement, but they do not rule out the possibility of initiating a forced investigation against him.

※ This SG Securities-triggered stock price crash has sounded an alarm for the capital market order. Readers’ tips will be a great help in uncovering the truth. We welcome any reports regarding investment damage cases, suspicions of stock price manipulation and asset concealment by Ra Deok-yeon’s group, and insider details about the mass sell-off by major shareholders of Daou Data and Seoul Gas (jebo1@asiae.co.kr). Asia Economy is committed to establishing a transparent capital market order.

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