Prosecution Executes Search and Seizure at Rainbow Robotics Over Use of Undisclosed Information
Investigation into Current and Former Executives for Alleged Violations of the Capital Markets Act
The prosecution has launched a compulsory investigation into suspicions of insider trading surrounding the domestic robotics company Rainbow Robotics. Authorities plan to examine whether current and former executives and employees gained illicit profits worth billions of won using undisclosed information.
According to the legal community on March 18, the Financial and Securities Crime Joint Investigation Division of the Seoul Southern District Prosecutors' Office dispatched investigators to Rainbow Robotics' headquarters in Yuseong-gu, Daejeon on this day to execute a search and seizure warrant. The search targets reportedly include the homes of Rainbow Robotics executives and employees, as well as Samsung Electronics' Suwon campus. The investigation was launched following a complaint filed by the Securities and Futures Commission of the Financial Services Commission against officials related to Rainbow Robotics.
Last month, financial authorities filed criminal charges against Rainbow Robotics CEO Lee and former Chief Financial Officer (CFO) Bang, accusing them of violating the Capital Markets Act. In addition, authorities requested an investigation into 14 other current and former executives and employees.
Lee and others are suspected of making illicit profits of between 3 billion and 4 billion won by purchasing large amounts of shares using undisclosed internal information during Samsung Electronics' acquisition of Rainbow Robotics shares from 2022 to 2024. Some of those involved reportedly even took out loans or informed acquaintances to profit from the information.
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Rainbow Robotics is a robotics company established by KAIST researchers who developed 'HUBO,' Korea's first bipedal humanoid robot. When the company was listed on KOSDAQ in 2021, its share price was around 10,000 won, but the stock price surged significantly after Samsung Electronics acquired a controlling stake at the end of 2024.
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