Kiwoom Securities Claims "We Are Also Victims" in Court Over Youngpoong Paper Incident

Kiwoom Securities, which incurred an unpaid amount of approximately 430 billion KRW due to the Yeongpung Paper stock manipulation scandal last year, has recently demanded to be recognized as a victim in the related court case.

According to the legal and securities industries on the 23rd, Kiwoom Securities submitted a statement to the Criminal Division 12 of the Seoul Southern District Court, which is handling the Yeongpung Paper stock manipulation case, earlier this month requesting to be recognized as a victim. They presented 433.3 billion KRW as the damage amount, excluding the 61 billion KRW recovered from the 494.3 billion KRW unpaid amount that occurred due to Yeongpung Paper’s lower limit price last October. Kiwoom Securities’ attorney stated at the trial on the 12th, "We hope to exercise rights as a victim during the trial process and to be explicitly named as a victim in the judgment."

Kiwoom Securities Building in Yeouido, Seoul (Photo by Yonhap News)

Initially, Kiwoom Securities applied to view some of the trial records but was denied on the grounds that they were not victims or related parties to the case. Therefore, they requested recognition as a victim through this statement. The prosecution has currently taken measures to seize and preserve the real and borrowed name assets of the Yeongpung Paper stock manipulation offenders.

The court expressed a negative stance, saying, "Structurally, it is difficult to consider Kiwoom Securities as a direct victim, so it may be hard to mention them in the judgment," but also stated, "We will review it appropriately."

However, within the securities industry, there are criticisms that Kiwoom Securities bears responsibility for lax risk management, given that its unpaid amount was unusually large compared to other securities firms. While other firms raised the margin rate to 100% to block unpaid transactions as Yeongpung Paper’s stock price suspiciously soared, Kiwoom Securities maintained it at 40%, thus suffering the full impact of the lower limit price shock.

Kiwoom Securities stated, "The stock manipulation group artificially boosted the stock price by holding most of the circulating shares of Yeongpung Paper and exploited Kiwoom Securities’ margin system. The perpetrators are the stock manipulators, and Kiwoom Securities is indeed a victim in this case."

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