As more cases are steadily uncovered of listed-company executives and employees committing unfair trading by using company insider information for stock trades, the Financial Supervisory Service launched training.
On the 10th, the Financial Supervisory Service (FSS) said it would send investigators with extensive field experience to 15 listed companies to explain major violations such as insider trading.
The Financial Supervisory Service (FSS) surveyed training demand among listed companies through the Korea Listed Companies Association and the KOSDAQ Association, and selected 15 companies after considering whether training had been conducted in the past and the number of participants. Six are KOSPI-listed companies and nine are KOSDAQ-listed companies.
As retail investors' participation in the stock market expands amid the modernization of Korea's stock market, and as unfair transactions by listed-company executives and employees continue to occur, raising investor concerns, the Financial Supervisory Service (FSS) arranged this training.
From 2023 through September this year, unfair trading by listed-company executives and employees resulted in 44 cases uncovered on the KOSPI, 110 on the KOSDAQ, and 9 on KONEX.
According to the Financial Supervisory Service (FSS), unfair trading acts uncovered look like this. When an executive A, who oversees finance and disclosures at a listed company, obtained undisclosed, material information that a memorandum of understanding had been signed regarding the transfer of management control by the largest shareholder, A passed this to another employee B to have B trade the stock. Using the undisclosed, material information from A, B bought the listed company's shares before the information was made public and realized unjust gains. The two were sanctioned on suspicion of violating the Financial Investment Services and Capital Markets Act (prohibition on the use of undisclosed, material information).
The Financial Supervisory Service (FSS) said it plans to provide training on topics of high interest to listed-company employees, such as the use of undisclosed information and the short-swing profit disgorgement rule, along with major violation cases and investigation examples, and that it will also explain recently strengthened sanctions, including the imposition of a penalty surcharge in addition to criminal punishment, to raise awareness among listed-company employees about complying with the law.