Super-rich individuals and others accused in the "first to be ruined by stock price rigging" case filed an objection with the court, arguing there were legal violations in the process of selecting evidence during the investigation. They claim it was unlawful for the Financial Services Commission to deploy Financial Supervisory Service staff, who lack compulsory investigative authority, in the process of selecting evidence.
The case is the first one released by the joint response team of financial authorities launched last year. According to the authorities, a wealthy figure who runs a general hospital and a large private academy, finance experts such as executives at an asset management company and a branch manager at a financial company, and a small shareholder activist are suspected of targeting DI Dongil, which has low daily trading volume, for stock price rigging and manipulating the price over a long period to reap illicit gains in the hundreds of billions of won.
According to the legal and financial investment sectors on the 2nd, the super-rich and others recently filed a quasi-appeal with the Seoul Southern District Court, arguing that the evidentiary power of the evidence collected by the joint response team composed of the Financial Services Commission and others should be excluded. A quasi-appeal is a system in which a party petitions the court to cancel or change a law enforcement agency's disposition such as a search and seizure or a judge's measure during trial.
They took issue with the fact that the Financial Services Commission brought in Financial Supervisory Service employees, who do not have compulsory investigative authority, during the process of selecting evidence. Under the current Financial Investment Services and Capital Markets Act, only investigators of the Financial Services Commission have the authority to conduct compulsory investigations such as searches and seizures and on-site inspections. In contrast, the Financial Supervisory Service can exercise only voluntary investigative authority premised on the other party's consent and cooperation.
At the time, the Financial Services Commission appears to have judged there was no problem with bringing in the Financial Supervisory Service, given that the joint response team, composed of the Financial Services Commission, the Financial Supervisory Service, and the Korea Exchange (KRX), conducts joint investigations. The Financial Services Commission is currently awaiting the court's decision.
Meanwhile, the Financial Supervisory Service says compulsory investigative authority is necessary. Hwang Seon-o, vice governor for capital markets and accounting at the Financial Supervisory Service, said at a press briefing last month, "If compulsory investigations are conducted alongside voluntary investigative authority, investigative capability will improve, allowing for the efficient investigation of forces that disrupt order in the capital market and the imposition of necessary sanctions."