A former reporter and a group with a securities firm background who allegedly made more than 11 billion won in illicit gains by boosting share prices with favorable articles about certain stocks and then unloading shares they had bought in advance denied the charges at their first trial.
The 11th criminal division of the Seoul Southern District Court (Presiding Judge Jang Chan, Director General) held the first hearing on the morning of the 20th for former reporter A, 51, and full-time investor B, 48, formerly of a securities firm, who were indicted and detained on charges including violating the Financial Investment Services and Capital Markets Act.
A and others were brought to trial on charges of reaping about 11.2 billion won in unfair gains through so-called front-running, in which they bought specific stocks in advance starting in early 2017 through June last year, wrote and disseminated favorable articles, and immediately sold when the prices rose.
They was found to have targeted small and mid-cap stocks with low trading volume or listed companies for which they obtained favorable information in advance, and continued the scheme. More than 2,000 articles were reportedly used in the process.
In the early stages, it was found that A asked another reporter at the business daily where A worked to write articles related to specific stocks, or received articles written by a reporter A knew before publication.
Afterward, articles were published under A's spouse's name or under fabricated names of non-existent people, and A is also charged with directly writing and reporting similar content through other media outlets.
The defendants flatly denied the indictment. The attorney said, "We deny all of the basic allegations in the indictment."
The next hearing is scheduled for Feb. 12 at 3 p.m.