A former employee of a broadcaster who took illicit gains through unfair trading using inside information was hit with a penalty surcharge larger than the ill-gotten gains. The financial authorities, which have signaled harsh punishment for unfair practices by saying they would "ruin stock manipulators," imposed an unusually high penalty surcharge before criminal disposition.
The Securities and Futures Commission under the Financial Services Commission said it approved an agenda at a regular meeting on the 10th to impose about 1.08 billion won in penalty surcharges on actors who engaged in unfair trading in the capital market by violating the ban on using undisclosed material information.
According to authorities, A, who worked as a disclosure officer in the finance team at SBS, obtained undisclosed key information that SBS would enter into a cooperation 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 likewise bought shares before the information was disclosed.
A's illicit gains from using undisclosed material information totaled about 850 million won. The SFC decided to impose a penalty surcharge of 1.04 billion won on A, an amount larger than the illicit gains. B also gained about 20 million won, and authorities imposed a penalty surcharge of 39.4 million won, nearly twice the illicit gains.
Of the total 870 million won in illicit gains taken by A and B, 510 million won in short-swing profits 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 recouped through the imposition of penalty surcharges. Authorities said this sanction is the second case in which a listed company employee who used undisclosed information has been hit with a penalty 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 intend to track and recover illegal gains from unfair trading to the end and deliver a strong message to the market that 'stock manipulation leads to ruin,'" adding, "In particular, we will strictly sanction violations by job categories with high access to undisclosed material information, such as media company executives and employees and disclosure officers."