Securities and Futures Commission Reports KOSDAQ IR Executive to Authorities for "Illicit Profit from Insider Information on New Drug Development"

An Investor Relations (IR) executive at a KOSDAQ-listed company has been caught gaining an illicit profit of 20 million won through the use of undisclosed insider information.

Summary of Insider Trading Case Involving Material Nonpublic Information of Listed Company A. Financial Services Commission and Securities and Futures Commission

The Securities and Futures Commission under the Financial Services Commission announced on September 2 at its 15th regular meeting that it has reported Executive A of the KOSDAQ-listed company to investigative authorities on suspicion of using material nonpublic information in violation of the Capital Markets Act.

According to financial regulators, Executive A used undisclosed, favorable internal information, including major results from an ongoing Phase 1 clinical trial of a new drug and the signing of a technology transfer agreement, to purchase shares of their own company under the name of an acquaintance from March to June 2024. Through this, the executive gained an illicit profit of approximately 20 million won and also evaded the obligation to report their ownership status.

If an insider uses material nonpublic information for trading purposes, it is a violation of the Capital Markets Act and can result in imprisonment for at least one year or a fine of up to six times the amount of illicit profit. An administrative penalty of up to twice the amount of illicit profit may also be imposed.

Additionally, executives and major shareholders are required to report any changes in shareholding or ownership within five days.

The Securities and Futures Commission stated, "To uphold the fairness of the capital market and protect investor confidence, we are closely monitoring unfair trading practices and will take strict action against any violations detected."

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