A retail investor who manipulated the price of a thinly traded stock using 13 accounts and took about 30 million won in unfair gains has been handed over to prosecutors.
The Securities and Futures Commission said on the 8th that at its 7th regular meeting it notified investigative authorities of a retail investor for violating the prohibition on market manipulation under the Financial Investment Services and Capital Markets Act after the investor pushed up a stock price through manipulation orders and reaped unfair gains.
According to the investigation, a retail investor surnamed A sought to profit from price gains in shares of company C by using 13 accounts belonging to five parties, including the investor, family members, and company B owned by the investor. From Mar. 21, 2017, to Apr. 30, 2018, the investor submitted a total of 5,042 manipulation orders covering 1,951,898 shares.
Through this, the investor drove up the price and obtained unfair gains of about 30 million won. During this period, the investor submitted manipulation orders for company C almost every day and repeatedly took out share-backed loans using company C shares as collateral, buying and selling company C shares while repaying the loans.
It was also confirmed that, despite securities firms' measures to prevent unfair trading, the investor moved among multiple securities firms and alternately used accounts under others' names.
An official at the Securities and Futures Commission said, "If you engage in market manipulation with the aim of causing others to make erroneous judgments, you may face criminal punishment under the Financial Investment Services and Capital Markets Act, including imprisonment of at least one year or a fine of up to six times the unfair gains."
The official added, "Using borrowed-name accounts for the purpose of unfair trading can also lead to criminal punishment for violating the Real Name Financial Transactions Act, including imprisonment of up to five years or a fine of up to 50 million won."