"Unlisted Shares Inflated Fourfold With 'About to Be Listed' Claim... Illegal Sellers Punished"

Sold 2,000-won shares for 9,000 won through deception

Court: "Significant harm to securities market integrity and public trust"

A group of individuals who inflated the price of unlisted shares from a company developing dementia prevention medical devices and pharmaceuticals, by falsely claiming the shares were about to be listed, have been sentenced to imprisonment and fines by the court.

On April 21, the Gwangju District Court Criminal Division 12 (Presiding Judge Jang Wooseok) announced that it had sentenced two defendants, including a 32-year-old surnamed A, to one year and six months in prison, suspended for three years, and a fine of 40 million won each, for violating the Financial Investment Services and Capital Markets Act. Five accomplices who were also indicted received prison sentences ranging from 10 months to one year, suspended for two years, and fines between 15 million and 30 million won each.

Gwangju District Court Building.

A and the others were indicted for establishing an unlicensed financial investment firm in Seo-gu, Gwangju, and selling 14,280 shares of unlisted stock to 17 investors via telemarketing between December 2021 and November 2022, illicitly obtaining 119.3 million won.

The investigation revealed that they deceived victims by claiming, "Company B is developing glasses and pharmaceuticals to prevent Parkinson's disease and dementia, and once listed, the shares will yield several times the profit." In particular, they exaggerated the promise of a listing premium, selling unlisted shares they had acquired at 2,000 won per share for more than four times that price, at 9,000 won per share. However, it was confirmed that the shares in question have still not been listed.

The court stated, "The defendants provided false information about stocks with uncertain profit potential, deceiving investors. This greatly undermines the fair formation of prices for unlisted shares and erodes trust in the integrity of the securities market, causing significant social harm."

The ruling further explained, "The organized nature of the crime caused substantial losses to many investors in a short period of time, resulting in serious damage to individuals, families, and society as a whole, and thus the responsibility is grave."

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