Outside Director of Listed Company Buys Stocks Using Undisclosed Information

Financial Services Commission and Securities and Futures Commission Notify Prosecutors

On the 9th, officials were busy moving in the corridor of the Financial Services Commission at the Government Seoul Office in Jongno-gu, Seoul, where financial authorities decided to include mortgage loans (Judaemae) in the 'debt refinancing' infrastructure scheduled to be launched in May by the end of the year. Financial authorities explained that they aim to reduce the interest burden on mortgage loans by building a debt refinancing platform that allows users to compare financial sector loan interest rates at a glance and switch loans easily. Photo by Yoon Dong-joo doso7@

An outside director of a KOSPI-listed company was caught purchasing stocks using undisclosed information.

On the 20th, the Financial Services Commission's Securities and Futures Commission announced on the 21st that at its 22nd regular meeting, it reported outside director A of the listed company to the prosecution on charges including the use of undisclosed important information.

Director A received a board meeting notice from the company regarding the "decision to acquire treasury shares to enhance shareholder value" and used this information to obtain several hundred million won in illicit gains. The stocks were traded before the information was made public, and A's spouse also purchased stocks.

It was investigated that Director A, recognized for decades of expertise as a certified public accountant, was appointed as an outside director of the listed company and had served as an outside director for several years, also performing duties as the chairperson of the audit committee.

The Securities and Futures Commission also detected Director A's violation of the "stock ownership reporting obligation," reported it to the prosecution, and took measures to ensure that short-term trading profits gained during the stock transactions are returned to the company.

The Commission pointed out, "The social condemnation is very high as the outside director, who should prevent illegal acts by directors and support the company's compliance management, violated duties and pursued private interests."

The financial authorities plan to continue providing unfair trade prevention education targeting listed companies to prevent repeated unfair trading acts involving outside directors and other executives of listed companies, and will strictly respond to unfair trading acts by executives of listed companies.

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