11 Billion Won Unfair Profit from 355 Short-Term Trades in 90 Seconds... Full-Time Investor Reported to Prosecution

The Securities and Futures Commission Warns "Excessive Short-Term Trading May Constitute Market Manipulation"

A full-time investor who gained unfair profits worth approximately 1.1 billion KRW through excessively repetitive 'small-lot trading' in a short period has been reported to the prosecution.

The Securities and Futures Commission under the Financial Services Commission announced on the 20th that it has reported investor A, who earned around 1.1 billion KRW in capital gains through small-lot trading, to the prosecution on charges of market manipulation.

Small-lot trading refers to the act of repeatedly submitting buy and sell orders for stocks in small quantities of around 10 shares within a short time.

It was investigated that Mr. A used eight stock accounts under his own and others' names to purchase large quantities of a specific stock, then continuously and repeatedly submitted small high-priced buy orders to attract buying interest and drive up the price. Once the price rose, he sold all the pre-purchased stocks to realize profits. This process occurred within an average of 42 minutes, with an average of 3.9 buy orders placed per second.

Looking at Mr. A’s market manipulation trading cases, it was found that he continuously submitted market buy orders of 2 shares a total of 355 times over 1 minute and 30 seconds, raising the stock price by about 7%. In another case, submitting continuous small-lot high-priced buy orders of 2 or 11 shares 500 times over about 6 minutes caused the stock price to rise more than 8%.

The Securities and Futures Commission also uncovered that the investor accused of market manipulation moved between multiple securities firms and alternated accounts under his own and others' names. Despite receiving a total of 27 refusals of custody and other measures from securities firms due to small-lot trading, he was still able to gain unfair profits using the same method.

The Commission warned that repetitive small-lot trading can be market manipulation rather than a legitimate investment technique. It emphasized, "Despite continuously detecting market manipulation through small-lot trading, it is still being promoted in some stock cafes and other places as a 'legal trading method,' so special caution is required."

Furthermore, investors were advised to be cautious if they observe small quantities (1 to 10 shares) of stocks being rapidly and repeatedly executed in the order book, as this may indicate short-term market manipulation.

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