Ra Deokyeon, Main Culprit in 'SG Scandal', Sentenced to 8 Years in Second Trial... 17 Years Reduced from First Verdict

Court: “The seriousness of the crime cannot be considered minor, but the defendant did not directly cause the stock crash”

Ra Deokyeon, the former head of an investment advisory firm and the main culprit behind the SG Securities-led stock crash, has been sentenced to eight years in prison on appeal, a reduction of 17 years from his initial sentence.

On November 25, the Seoul High Court’s Criminal Division 3 (Presiding Judge Lee Seunghan) overturned the original verdict of 25 years in prison for Ra, who had been charged with violating the Capital Markets Act and the Act on Regulation of Concealment of Criminal Proceeds, and instead sentenced him to eight years in prison. Ra was also fined approximately 146.5 billion won and ordered to forfeit an additional 181.5 billion won.

Ra’s associates, Byun and Ahn, who had also received prison sentences in the first trial, had their sentences reduced on appeal to three years in prison with five years of probation, and two years and six months in prison with four years of probation, respectively.

The court stated, “Due to the price manipulation, stock prices were artificially inflated for a long period and then plummeted in an instant, causing irreparable losses to numerous innocent investors. The defendant also concealed criminal proceeds through various methods, resulting in tax evasion, so the seriousness of the crime cannot be considered minor.” However, the court added, “Unlike typical price manipulation cases where the perpetrator artificially boosts stock prices and then sells off to make a profit, the defendant also lost all investment returns as of April 24, 2023.”

The court continued, “The defendant did not directly cause the stock price crash, nor has it been confirmed who was directly responsible for the crash or who ultimately benefited from this case. Further investigation appears necessary.”

Between May 2019 and April 2023, Ra and his associates were tried on charges of manipulating the stock prices of eight listed companies by pre-setting purchase and sale prices and then selling off large volumes, making approximately 730 billion won in profits. This was the largest stock price manipulation case ever uncovered.

They were also charged with accepting discretionary investments without registering with financial authorities from January 2019 to April 2023, collecting approximately 194.4 billion won in fees, and hiding the same amount of fees in accounts under borrowed names.

The SG Securities-led stock crash refers to the incident on April 24, 2023, when a massive volume of sell orders at the SG Securities branch caused the stock prices of eight companies, including Daou Data, to plunge. Following allegations of price manipulation, prosecutors launched an investigation and indicted Ra and the other participants in May 2023.

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