Prosecutors Conduct Search and Seizure at Shinpung Pharmaceutical and Two Others Over Insider Trading Allegations

The prosecution has launched a compulsory investigation into allegations that Jang Won-jun, the second-generation former CEO and founder of Shinpung Pharmaceutical, avoided losses by having prior knowledge of the clinical trial results of a COVID-19 treatment.

Seoul Central District Prosecutors' Office in Seocho-gu, Seoul. Photo by Yonhap News

The Financial Investigation Division 1 of the Seoul Southern District Prosecutors' Office (Chief Prosecutor Kim Su-hong) announced that on the 27th at 10 a.m., they conducted a search and seizure at the headquarters of Shinpung Pharmaceutical in Gangnam-gu, Seoul, as well as at the headquarters of Samsung Securities in Seocho-gu, Seoul, and Meritz Securities in Yeongdeungpo-gu, Seoul.

According to the Financial Services Commission's Securities and Futures Commission, former CEO Jang is suspected of avoiding losses of approximately 36.9 billion KRW by disposing of Shinpung Pharmaceutical shares based on undisclosed information. Although Shinpung Pharmaceutical failed in clinical trials for developing a COVID-19 treatment, it is reported that before this fact was made public, Jang and his family sold shares held by Songamsa through off-market transactions (block deals).

The prosecution also plans to verify whether Meritz Securities and Samsung Securities were involved in the transaction process.

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