Stock Manipulation Leads to Unfair Gains of Over 20 Billion Won... Quantapia Investors Face Trial
Allegations of Violating the Capital Markets Act
A man in his 50s has been indicted for allegedly profiting around 20 billion KRW by boosting stock prices through leaking preliminary information about mergers and acquisitions (M&A).
On the 15th, the Financial and Securities Crime Joint Investigation Unit of the Seoul Southern District Prosecutors' Office (Chief Prosecutor Gong Jun-hyeok) announced that investor Lee (58) was arrested and indicted for violating the Capital Markets Act for manipulating stock prices and engaging in fraudulent trading activities to boost the stock prices of the listed companies Quantapia and Joongang D&M.
According to the prosecution, Lee is accused of manipulating stock prices by leaking preliminary information about the M&A of the two companies, thereby obtaining an illegal gain worth approximately 20.1 billion KRW.
From November 2022 to October last year, Lee manipulated the stock price of Joongang D&M, earning an illegal gain of about 14 billion KRW, and from May to December last year, he manipulated Quantapia's stock price, obtaining an illegal gain of approximately 1.1 billion KRW. Furthermore, in June last year, he reportedly gained about 5 billion KRW through false disclosures related to convertible bonds worth around 100 billion KRW issued by Quantapia.
Quantapia was fined 60 million KRW by the Securities and Futures Commission in December last year for falsely recording cost of sales in 2018 and forging documents requested by auditors. Subsequently, its stock trading was suspended by the Korea Exchange.
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The prosecution launched a raid on Quantapia’s headquarters and related personnel in August and arrested Lee on the 29th of last month. The court issued an arrest warrant for Lee on the 1st, citing concerns over evidence destruction and flight risk.
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