‘Batteri Ajussi’ Explanation Post Fuels Controversy... Potential Violation of Capital Markets Act Article 98

Posted a statement on dual employment controversy and fraudulent unfair trading on 'SeondaeinTV'
Illegal if a third party is advised to trade and the asset manager trades
Potential violation of Article 98 of the Capital Markets Act... Dual employment ban issue needs review

Park Soon-hyuk, an artist famous as the 'Battery Uncle,' seems to have intensified the controversy with his explanation. Park stated on YouTube that there was no problem with purchasing the battery stocks from customer accounts after recommending the stocks, but financial authorities believe there is a possibility that he violated the 'Prohibition of Unsound Business Practices' (Article 98 of the Capital Markets Act).

Park posted a statement on the YouTube channel 'SeondaeinTV' regarding the controversy over holding concurrent positions and fraudulent unfair trading. This was a rebuttal to suspicions that if Park had purchased battery stocks first through advisory clients' accounts and then recommended the stocks on YouTube, it could be considered fraudulent unfair trading. He said, "The broadcast on SeojeongdeokTV stating 'Ecopro will go up 30 times, Ecopro BM 10 times' was on June 16, 2022, and the purchase from customer accounts was on June 27, 2022," adding, "I recommended the stocks on YouTube first and then made the purchase."

However, financial authorities explained that Park's explanation could be seen as a violation of Article 98 of the Capital Markets Act, which prohibits unsound business practices. This perspective differs from the market's criticism of Park's activities as 'fraudulent unfair trading' (Article 178 of the Capital Markets Act). A financial authority official said, "Recommending battery stocks on YouTube first and then purchasing them through customer accounts may not constitute fraudulent unfair trading, but there is a possibility of violating Article 98 of the Capital Markets Act."

Article 98, Paragraph 5 of the Capital Markets Act prohibits "when managing discretionary investment assets, engaging in acts such as trading financial investment products on one's own account or recommending trades to a third party after deciding on investment advice or trading intentions that could significantly affect the price of financial investment products before executing them." Simply put, if an employee of an asset management company decides to trade stocks, bonds, or other financial investment products, they must not recommend those stocks to a third party before making the trade themselves.

Fraudulent unfair trading relates to Article 178 of the Capital Markets Act and is summarized as acts intended to induce transactions to gain financial benefits. Park emphasized in his statement that he did not personally profit from the stock price increase, which aligns with this context.

However, there is also a view that the ban on holding concurrent positions due to conflicts of interest, which caused controversy the day before, is difficult to punish depending on interpretation. The ban on concurrent positions in financial affiliates applies to executives, and there is an opinion that a 'head of department' cannot be considered an executive.

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