Arrest and Prosecution of Stock Manipulation Suspect Using Virtual Figure as Main Culprit to Obstruct Investigation
A stock manipulation offender who created a fictitious person to shift responsibility for stock manipulation and coerced false testimony from acquaintances was arrested and indicted.
On the 16th, the Joint Investigation Unit for Financial and Securities Crimes of the Seoul Southern District Prosecutors' Office (Chief Gong Junhyeok) announced that Mr. A (51) was arrested and indicted on charges of violating the Capital Markets Act and perjury, while six other accomplices were indicted without detention. Mr. A, the actual owner of a KOSDAQ-listed company used to boost stock prices, and Mr. B (41), the CEO of a venture investment firm, face charges of violating the Capital Markets Act and special economic crimes (embezzlement). Mr. C (47), an acquaintance of Mr. A, is charged with violating the Capital Markets Act, and the remaining four individuals face charges of suborning perjury and perjury.
They planned and executed a scheme to obtain unfair profits totaling approximately 30 billion KRW by exploiting the boom in the bio sector in the KOSDAQ stock market. In March 2018, they distributed false press releases related to bio business promotion to gain unfair profits and manipulated stock prices through wash sales and high-priced purchase orders for businesses they owned. When the Financial Supervisory Service investigation began in October 2019, they created fictitious persons and scenarios to falsely testify about actual shareholders and also coerced others to commit perjury. This caused prolonged difficulties in the investigation.
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A prosecutor stated, "Over a period of more than two years, we tracked the main perpetrator and the fictitious persons involved and discovered that everything was a scenario. To prove the charges, we meticulously analyzed forensic data from seized mobile phones and computers, as well as numerous account transaction records, which allowed us to uncover the full extent of the case."
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