Stock Prices Manipulated and Advance Trades Made Through "Featured Stock" Articles... Eight Including Reporters Indicted

Accountant and Current and Former Economic Newspaper Reporters Colluded
Profited 8.55 Billion Won Through 1,800 Featured Stock Articles

Former and current economic newspaper reporters, along with an accountant and others, have been indicted en masse for inflating stock prices through "featured stock" articles, profiting from the price differences, and exchanging money for article distribution.

The Seoul Southern District Prosecutors' Office Financial Investigation Division 2 (Chief Prosecutor Kim Tae-gyeom) announced on July 29 that it had indicted four individuals—including Mr. A, an accountant-turned-head of an unlicensed investment advisory firm, and economic newspaper reporters B, C, and D—under detention on charges including violations of the Capital Markets Act. Additionally, it indicted four others, including economic newspaper reporters E, F, and G, and a general investor H, without detention.

Seoul Southern District Prosecutors' Office. Yonhap News Agency

According to the prosecution, from October 2020 to June last year, Mr. A and others are accused of unlawfully obtaining approximately 8.55 billion won through around 1,800 advance trading cases using featured stock articles.

Mr. D is suspected of purchasing stocks of targeted companies just before publishing featured articles he wrote, and then selling them after publication, thereby earning around 740 million won in illicit gains from October 2022 to July 2024. He is also accused of hiding criminal proceeds by using a securities account under an acquaintance's name to evade detection by financial authorities.

Mr. A allegedly recruited the reporters by agreeing to pay them 300,000 won per featured stock article. After conspiring with Mr. E, he subsequently brought in Mr. B, Mr. F, and Mr. G in turn. Mr. B then recruited Mr. C, resulting in a total of five economic newspaper reporters participating systematically. Mr. D acted alone, using his authority to distribute his own articles.

The prosecution's investigation revealed that Mr. A selected small- and mid-cap stocks or theme stocks with low trading volume or high price volatility, drafted initial versions of the featured stock articles, and provided them to the reporters. The reporters published the articles, and Mr. A and associates bought the relevant stocks before the articles appeared on portals, home trading systems (HTS), or mobile trading systems (MTS). Once the articles went public and buying by general investors pushed up prices, they immediately sold their holdings to reap profits. Mr. A made the largest profit at 7.13 billion won, followed by Mr. B with 350 million won, Mr. E with 750 million won, Mr. F with 260 million won, and Mr. H with 60 million won in illicit gains.

The prosecution also uncovered that large sums of money changed hands as compensation for distributing the articles. Mr. A and Mr. B allegedly paid around 150 million won to Mr. C. Mr. A is also said to have given approximately 116 million won to Mr. E and about 28 million won to Mr. G. The transactions involved methods such as cash withdrawals from ATMs, leaving cash in gym lockers, and bank transfers.

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