Prosecutors Indict 16 in 'Yeongpung Paper Stock Manipulation' Case... Record High Illegal Gains of 661.6 Billion Won

The prosecution has indicted 16 individuals who manipulated the stock price of the KOSPI-listed company 'Yeongpung Paper' and obtained illicit gains amounting to 661.6 billion KRW. The scale of illicit gains obtained through this crime is the largest ever recorded for stock price manipulation involving a single stock.

The Financial and Securities Crime Joint Investigation Division of the Seoul Southern District Prosecutors' Office (Chief Prosecutor Ha Dong-woo) announced on the 14th that the mastermind of this stock price manipulation case, Mr. Lee, was arrested and indicted on charges of violating the Capital Markets Act, along with the interim investigation results.

The amount of illicit gains revealed during the investigation has more than doubled compared to the 279 billion KRW scale presented by the prosecution at the time of the first indictment related to the Yeongpung Paper incident last year. Among the 16 indicted individuals, 12, including the mastermind Mr. Lee, were indicted while in custody.

Seoul Southern District Prosecutors' Office. [Photo by Yonhap News]

Mr. Lee and his group are accused of using a total of about 330 securities accounts from October 2022 to October last year to place 227,448 market manipulation orders, including fictitious and collusive trades and high-priced purchases, on Yeongpung Paper stock, obtaining illicit gains worth approximately 661.6 billion KRW. During this period, Yeongpung Paper's stock price soared about 14 times, from 3,484 KRW to 48,400 KRW. Since the investigation into them became public on October 18 last year, the stock price has plummeted sharply and currently remains in the 2,300 KRW range.

The main culprit, Mr. Lee, fled around October last year as the investigation tightened but was arrested last month on the 26th while attempting to stow away to Vietnam from the waters near Jeju Island, about three months after his escape. The prosecution has obtained arrest warrants and is tracking several members of the organization who disappeared after fleeing early in the investigation, and is currently invalidating the passport and issuing a red notice for one member who fled overseas.

A prosecution official stated, "We will thoroughly pursue and confiscate the illicit gains obtained by other accomplices through the crime."

Meanwhile, the representative lawyer of the law firm who was arrested and indicted on charges of aiding Mr. Lee's escape, as well as the other accomplices involved in the Yeongpung Paper stock price manipulation, are already on trial. Most of them admit to the charges in court but claim, "We only followed Mr. Lee's instructions."

The prosecution said it plans to consider reduced sentencing requests for those who voluntarily report or submit related evidence and cooperate during the investigation and trial procedures by utilizing the penalty reduction application system introduced in the revised Capital Markets Act, which has been in effect since January this year.

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