The government filed a criminal complaint with prosecutors in the first case handled by the joint response team launched to stamp out stock price manipulation. The so-called "super-rich stock manipulation" case found that wealthy individuals, including a hospital director and a head of a large cram school, and financial experts systematically took part and pocketed illicit gains worth tens of billions of won.
The Securities and Futures Commission under the Financial Services Commission said it held a regular meeting on the 11th and filed a complaint with prosecutors against 11 individuals, including wealthy people who run a general hospital and large cram schools, an executive at an asset management company, and a branch manager at a financial firm, as well as four related corporations, for violating the Financial Investment Services and Capital Markets Act's ban on market manipulation and unfair transactions.
According to the Securities and Futures Commission (SFC), they selected DI Dongil, which has low daily trading volume, as the target for stock manipulation and raised more than 100 billion won in market-manipulation funds by mobilizing corporate funds they control and loans from financial companies.
They also dispersed transactions by using dozens of accounts to evade surveillance. In the process, they placed various market-manipulating orders, including high-priced bids, spoofing bids, and opening and closing price interventions, and manipulated the stock for about 1 year and 9 months. During this period, DI Dongil shares nearly doubled.
They also recruited an executive at the company and an employee at a securities firm. Using a minority shareholder campaign as a pretext, they pressured company management to sign a share buyback contract and, through the employees they had brought in, had buy orders submitted from the trust account as they intended. They then sold their holdings to lock in profits.
The illicit gains the suspects took from this case are estimated at about 40 billion won. Financial authorities said it is significant that they additionally uncovered unfair trading and, for the first time, secured resources to recoup illicit gains through a payment suspension measure.
An official at the Financial Services Commission (FSC) said, "We will impose a penalty surcharge of up to twice the illicit gains and actively apply new administrative sanctions, such as restrictions on trading financial investment products and on executive appointments, to ensure a 'one strike out' is realized, and we will do everything we can in the follow-up steps."