"Ruinous Stock Manipulation" Joint Response Team to Detect Unfair Trading More Quickly with AI

First Anniversary Performance Review Meeting of the Joint Task Force
Plans to Introduce Authority to Request Communication Data

The Joint Task Force for the Eradication of Stock Price Manipulation, launched in July last year with the goal of “ruining those who manipulate stock prices,” is accelerating its investigative process by fully adopting an AI-powered case analysis agent.

On the morning of July 8, Financial Services Commission (FSC) Chairman Lee Eogwon announced at the “First Anniversary Performance Review Meeting of the Joint Task Force for the Eradication of Stock Price Manipulation,” held at the Korea Exchange in Yeouido, Seoul, “The task force has uncovered unfair trading by journalists and executives at securities firms, instilling a sense of urgency in the market that ‘illegal acts will inevitably be detected.’” He added, “We will not rest on these achievements and will further strengthen the operation of investigations.”

The case analysis AI agent will be introduced to enhance the Korea Exchange’s AI surveillance system. By detecting crimes committed using social networking services (SNS) and providing analytical results that match detection conditions such as trading patterns, the AI will accelerate investigative speed. The FSC also plans to expand its investigative capabilities by acquiring the latest forensic equipment.

The FSC is also strengthening the investigative powers of the task force. In the third quarter of this year, the FSC plans to revise the Capital Markets Act to introduce the authority to request communication data to prevent the destruction of evidence, and to expand the scope of principal confiscation and recovery from just price manipulation to also include insider trading and unfair trading. In addition, the FSC is considering extending the account payment suspension period for unfair trading to ensure that unjust profits are properly recovered.

So far, the task force has reported multiple stock price manipulation cases to prosecutors or is currently investigating them. In March, 15 individuals—including a major cram school owner and a hospital director—were referred to the prosecution on charges of manipulating the stock price of DI Dongil with 100 billion won. In May, eight people—including a former executive of NH Investment & Securities and acquaintances—were handed over to prosecutors for allegedly passing on tender offer information for 11 stocks managed by NH Investment & Securities to acquaintances for unfair gain. Investigations are also underway into journalists suspected of front-running by purchasing stocks before favorable news reports about specific stocks and selling them after publication.

Efforts to bolster the task force’s capacity to respond to stock price manipulation continue. Initially launched with one team of 36 members, the task force was expanded in January to two teams totaling 62 members. In the first half of this year, the number of personnel increased to 90, and the FSC plans to further expand the workforce to 100.

This content was produced with the assistance of AI translation services.