Arrest warrants were rejected for four suspects accused of manipulating stock prices after raising funds for price rigging worth about 100 billion won.
Hwang Jung-yeon, Director General judge in charge of warrants at the Seoul Southern District Court, held a pretrial detention hearing (substantive warrant review) from 2 p.m. on the 2nd for four people, including a person surnamed Kim, a person surnamed Jeong, a person surnamed Shin, and a person surnamed Jang, who are suspected of violating the Financial Investment Services and Capital Markets Act, and then rejected arrest warrants for all of them.
Director General Judge Hwang explained the reason for rejection, saying, "There is room for dispute over whether the crime of price rigging is established or over its scope, so guaranteeing the suspects' right to a defense appears necessary."
He also said, "The warrant application does not specifically state which provision among Article 176, paragraphs 1 to 3, of the Financial Investment Services and Capital Markets Act was violated by the total of 65,168 instances of price-rigging conduct, and it is expected to significantly hinder the suspects' exercise of their right to a defense."
He added, "Since a quasi-appeal has been filed alleging illegality in the seizure procedure that served as the main means of securing key evidence of the alleged facts, it is appropriate to wait for the outcome," and said, "It is difficult to see that the risk of flight or destruction of evidence has been sufficiently substantiated, and it is also hard to recognize the necessity and reasonableness of detention."
The suspects are accused of selecting DI Dongil, which has low daily trading volume, as the target stock for price manipulation, pooling funds in the 100 billion won range from corporate funds and loans from financial companies, and artificially manipulating prices through methods such as wash sales and matched orders.
They are said to have lured investors by pressuring DI Dongil management under the pretext of a minority shareholder campaign to enter into a trust contract for treasury share purchases and then managing the stock price.
At the time the stock manipulation was underway, DI Dongil's share price roughly doubled, and their buy orders were reported to account for about one-third of total market transactions.
The case came to light in March when the Securities and Futures Commission of the Financial Services Commission filed a complaint with prosecutors against 11 individuals—including a wealthy person who runs general hospitals and large cram schools, an executive at an asset management company, financial experts such as a branch manager at a financial company, and a minority shareholder activist—and four related corporations for violating the prohibition on price-rigging and unfair trading under the Financial Investment Services and Capital Markets Act.
It also drew attention as the joint response team's "first 'ruin-your-life stock manipulation' case" launched after President Lee Jae-myung emphasized eradicating unfair trading.
Prosecutors requested arrest warrants for the four suspects on the 26th of last month.