Five Stocks Hit Lower Limit Suspected of Price Manipulation...Financial Authorities "Urgently Inspecting for Unfair Trading"

Five Stocks Hitting Lower Limit to Be Suspended from Trading Starting Tomorrow
Naver Stock Community Suspected in Price Crash
Financial Authorities Investigate Related Stocks' Trading and Bank Accounts

A series of limit-down price drops occurred less than a month after the Soci?t? G?n?rale (SG)-originated Contract for Difference (CFD) stock price crash incident. Although similar to the SG-originated stock price crash, there are differences, prompting financial authorities to launch an investigation into possible unfair trading.

According to the Korea Exchange on the 14th, at around 11:46 a.m., the stock price of Bangrim, a KOSPI-listed company, hit the limit-down price. Subsequently, Dongil Metal, Dongil Industry, Manho Steel, and Daehan Textile consecutively entered limit-down status. As five stocks simultaneously dropped to their limit-down prices, the KOSPI and KOSDAQ, which had started the day with gains, closed down 0.72% and 2.79% respectively compared to the previous day.

The reason these stocks are suspected of price manipulation is that they have no commonalities yet simultaneously hit limit-down prices. In particular, the low trading volumes and the gradual price increases over a long period bear some resemblance to the SG-originated stock price crash incident. For example, Dongil Industry recorded about 10,000 shares traded on the day it hit the limit-down price, whereas its usual volume ranges from 1,000 to 4,000 shares. Dongil Metal’s usual volume ranges from 5,000 to 50,000 shares, Daehan Textile from 400 to 40,000 shares, Bangrim from 50,000 to 800,000 shares, and Manho Steel from 6,000 to 170,000 shares.

However, unlike the CFD stock price crash incident, the selling orders did not come from a single outlet. A securities firm official stated, "No sell orders came from CFD accounts, nor were there sell orders due to forced liquidation such as margin calls. We found no grounds to judge this as abnormal trading."

Meanwhile, rumors have surfaced that the five stocks were recommended by Naver’s stock community 'ㅂ' Investment Research Institute, fueling suspicions of price manipulation. The head of 'ㅂ' Investment Research Institute was convicted last December by the Supreme Court for stock price manipulation, receiving a two-year prison sentence with a four-year probation and a fine of 400 million won. The head is known to deny involvement in stock price manipulation allegations.

Financial authorities suspended trading of the five stocks starting from the 15th and requested disclosure inquiries. Three stocks (Dongil Metal, Bangrim, Manho Steel) were designated as investment caution stocks.

The Korea Exchange is providing securities trading data related to the stocks to financial authorities, who are expected to review bank account transaction details of suspicious stocks. Based on this, if the possibility of unfair trading is deemed high, a full-scale investigation will be expanded.

A financial authority official stated, "We are thoroughly investigating stocks suspected of unfair trading, and if any charges are found, we are taking strict measures under a zero-tolerance policy."

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