A former employee of a broadcaster who took unfair profits through unfair trading using inside information was hit with a penalty surcharge larger than the illicit gain. Signaling a hard line on unfair practices by saying it would "ruin stock manipulators," the financial authorities imposed an unusually high penalty surcharge before criminal disposition.
The Securities and Futures Commission under the Financial Services Commission said it voted at a regular meeting on the 10th to impose about 1.08 billion won in penalty surcharges on those who engaged in unfair trading in the capital market by violating the ban on using undisclosed material information.
According to the authorities, A, who worked as the disclosure officer in the finance team at SBS, obtained undisclosed key information that SBS would form a partnership with Netflix to supply content and bought company shares from Oct. to Dec. 2024. A also passed the information to A's father, B, who bought shares before the information was disclosed.
A's unfair gains from using undisclosed material information totaled about 850 million won. The Securities and Futures Commission (SFC) decided to impose a penalty surcharge of 1.04 billion won, an amount larger than the illicit gain. B also earned about 20 million won in unfair profit, and the authorities imposed a 39.4 million won penalty surcharge, nearly twice the illicit gain.
Of the total 870 million won in unfair gains taken by A and B, 510 million won in short-swing profit has already been returned.
In the past, unfair practices using undisclosed information could only be criminally punished, but starting in 2024, illegal gains can be recovered by imposing penalty surcharges. The authorities said this sanction is the second case in which a listed company employee who used undisclosed information has been hit with such a measure since the system took effect.
This penalty surcharge was imposed before criminal disposition through close interagency coordination, and depending on the outcome of criminal proceedings, imprisonment or a fine could also be added.
The Securities and Futures Commission (SFC) said, "We will track and recover illegal gains obtained through unfair trading to the end to deliver a strong message to the market that 'stock manipulation means ruin,'" and added, "In particular, we will strictly sanction violations by occupational groups with high access to undisclosed material information, such as media company executives and employees and disclosure officers."