Prestigious University Elites' 20 Billion Won Stock Manipulation Cartel Exposed After Five Years

Diverted M&A Information Passed to Family and Acquaintances
Over 20 Billion Won in Illicit Gains Accumulated Over Five Years

AI graphic created based on the press release of the Joint Response Team for Eradication of Stock Manipulation

The Joint Response Task Force for Eradicating Stock Price Manipulation, established by the Financial Services Commission, the Financial Supervisory Service, and the Korea Exchange, announced on the 29th that it has uncovered a group that used non-public information related to governance structure restructuring or mergers and acquisitions (M&A), such as public tenders for listed companies, to obtain illicit gains of over 20 billion won.

The key suspects in this case are former members of prestigious university business clubs and global consulting firms. They formed a type of "information cartel," sharing insider information from listed companies and involving family and acquaintances in systematically exploiting non-public information over an extended period.

On this day, the task force executed search and seizure operations at more than 20 locations, including the suspects’ homes and offices, to secure on-site evidence related to the case. At the same time, the Securities and Futures Commission implemented a freeze on the securities accounts of the suspects, where the illicit gains obtained through the use of non-public information were held, in accordance with the Capital Markets Act. This preemptive measure was taken to ensure the complete recovery of the illegally acquired assets.

The suspects developed their connections while participating together in prestigious university business clubs and global consulting companies, later moving on to private equity management firms and listed companies, where they performed M&A-related work such as public tenders. Over the past five years, they reportedly continued to share positive, non-public information about numerous stocks that they accessed during the course of their work, on a continual and repeated basis.

The core suspects used this information for their own stock trading and passed it along to their family members and acquaintances for the same purpose. According to the task force, before the information was made public, the main suspects and their family and acquaintances bought shares of the relevant stocks, and after the information was released and the share prices rose, they sold them at high prices. In this way, they obtained illicit gains totaling more than 20 billion won.

A spokesperson from the task force stated, "This case is extremely serious, not only because information sharing occurred repeatedly over a long period within a clandestine information cartel rather than as an isolated incident, but also because the sources of information were professionals obliged to the strictest confidentiality as part of their M&A-related work, and because the information was disseminated to family and acquaintances, significantly broadening the scope of those engaging in unfair trading."

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