Before information was announced that the transfer listing had been canceled, company executives who sold their stocks to avoid a loss of 1.1 billion won were referred to the prosecution.
On the 19th, the Financial Supervisory Service (FSS) announced it was investigating an executive of a Konex-listed company for allegedly using undisclosed information during the transfer listing process to KOSDAQ and referred four individuals to the prosecution with a recommendation to indict.
According to the FSS, the executive realized the transfer listing requirements were not met during a paid-in capital increase process and shared negative information with three acquaintances.
They are under suspicion of selling their shares before the public announcement of the cancellation of the transfer listing, thereby avoiding a loss amounting to 1.1 billion won.
Even if a company is listed on Konex, employees are subject to criminal penalties under the Capital Market Act if they use undisclosed information for stock transactions, similar to those listed on KOSPI and KOSDAQ. The same applies if they enable others to use undisclosed information.
The FSS stated, “Not only is using such information for purchasing prior to the disclosure of positive information, such as performance improvements, considered using undisclosed information, but also avoiding losses with negative information falls under the same category.” It noted, “Any actions that undermine fair transaction order will be thoroughly investigated.”