Prosecutors Indict Securities Analyst on 'Front-Running' Charges... 500 Million KRW Illicit Gains

An analyst who gained unfair profits of about 500 million won through a 'front-running' method of recommending stocks he purchased has been brought to trial.

The Financial Investigation Division 1 of the Seoul Southern District Prosecutors' Office (Chief Prosecutor Chae Hee-man) announced on the 20th that it has indicted securities analyst Mr. A (42) without detention on charges of violating the Capital Markets Act, the Electronic Financial Transactions Act, and the Telecommunications Business Act.

According to the prosecution, Mr. A is accused of using non-public information obtained through his duties from July 2013 to April last year to purchase stocks of companies before publishing 'buy recommendation' research reports, and then selling the stocks after the reports were made public, thereby earning unfair profits totaling approximately 520 million won through front-running.

The prosecution identified that Mr. A exploited the rise in stock prices of the analyzed companies at the time of publishing the 'buy recommendation' research reports and engaged in front-running on 22 stocks over a period of 10 years.

He is also charged with borrowing bank accounts and check cards under the names of acquaintances to conceal the source of criminal proceeds in February last year, and requesting SIM cards from his spouse and another acquaintance to open mobile phone lines under their names.

The prosecution has requested seizure and preservation of about 600 million won to recover Mr. A's criminal proceeds. A prosecution official stated, "Analysts are required by work regulations to provide information before publication, but front-running practices are widespread," and added, "We will strictly respond to unfair trading that disrupts market order and damages investor trust."

Earlier, the prosecution requested an arrest warrant for Mr. A, but the court dismissed it on the 11th, stating that "there is little concern of flight risk or evidence destruction."

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