Prosecutors Indict Mastermind of 'Yeongpung Paper Stock Manipulation'... Unlawful Gains of 661.6 Billion Won, Record High (Comprehensive)

Prosecutors Indict 16 Members Including Mastermind in Stock Price Manipulation
48 Price Manipulation Orders via Over 330 Securities Accounts
Stock Price Inflated 14 Times... Largest Scale for a Single Stock

The prosecution indicted Lee Mo (54), the ringleader of the stock price manipulation group involving the KOSPI-listed company 'Yeongpung Paper', on the 14th. So far, a total of 16 people, including Lee, have been brought to trial in connection with the Yeongpung Paper incident. The unfair profits identified by the prosecution amount to 661.6 billion KRW, marking the largest scale of stock price manipulation for a single stock in history.

The Financial and Securities Crime Joint Investigation Division of the Seoul Southern District Prosecutors' Office (Chief Prosecutor Ha Dong-woo) indicted Lee, the mastermind behind the Yeongpung Paper stock price manipulation case, on charges of violating the Capital Markets Act and announced the interim investigation results on the same day. The amount of unfair profits revealed during the investigation more than doubled compared to the 279 billion KRW figure presented by the prosecution at the time of the first indictment related to the Yeongpung Paper incident last year. Among the 16 people indicted this time, 12, including Lee, were brought to trial while in custody.

Hwang Woo-jin, Human Rights Protection Officer and Public Relations Officer at the Seoul Southern District Prosecutors' Office, is briefing the interim investigation results on the Yeongpung Paper stock manipulation case, in which the suspect was arrested while on the run, at the Seoul Southern District Prosecutors' Office on the morning of the 14th.
[Image source=Yonhap News]

Lee and his group are accused of obtaining unfair profits worth approximately 661.6 billion KRW through 227,448 price manipulation orders, including fictitious and collusive trading and high-priced purchases, using a total of about 330 securities accounts from October 2022 to October last year. 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.

However, the 661.6 billion KRW in unfair profits presented by the prosecution includes both realized and unrealized gains. It is understood that most of the profits realized during the approximately 13-month price manipulation process were reinvested for further illegal activities. Regarding the actual final amount of profits attributed to Lee and his group, the prosecution stated that it is "under investigation."

Despite the abnormal surge in Yeongpung Paper's stock price within a short period, the prosecution revealed that company representatives and related parties, including the CEO, appeared to have been unaware of the stock price manipulation. In response to related questions, Ha Dong-woo, head of the joint investigation division, said, "So far, based on the investigation, nothing has been confirmed regarding the Yeongpung Paper CEO or executives," adding, "We plan to continue investigating whether there are additional accomplices."

The main culprit Lee fled around October last year as the investigation tightened but was arrested about three months later on the 26th of last month while attempting to stow away to Vietnam from the waters near Jeju Island.

The prosecution has identified about 20 members of the organization, including Lee. In the early stages of the investigation, the prosecution obtained arrest warrants and is tracking several members who fled and disappeared. For one member who escaped overseas, the prosecution is in the process of invalidating their passport and issuing a red notice.

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

Meanwhile, the head lawyer of a law firm, who was arrested and indicted on charges of aiding Lee's escape, and 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 Lee's instructions."

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

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