Seoul National University Elites Caught in KRW 20 Billion Stock Manipulation Cartel (Comprehensive)

M&A Information Diverted and Shared with Family Members and Acquaintances

Illegitimate Profits Estimated at Over KRW 20 Billion Over Five Years

A group of elite alumni from the Seoul National University business club formed an "information cartel," sharing undisclosed merger and acquisition (M&A) information for several years and securing over 20 billion won in illicit gains. The scheme has been uncovered by authorities.

Leaked M&A information passed on to family and acquaintances

The "Joint Task Force for Eradication of Stock Price Manipulation," established by the Financial Services Commission, the Financial Supervisory Service, and the Korea Exchange, announced on the 29th that they had detected individuals using undisclosed information to earn more than 20 billion won in illicit gains by exploiting public tender offers and other M&A or corporate governance restructuring activities involving listed companies.

The primary suspects in this case, all former members of the Seoul National University business club and global consulting firms, formed a type of "information cartel" to share inside information from listed companies. They enlisted family and acquaintances and systematically used undisclosed information over a long period. According to authorities, there are about five individuals involved, mainly in their 30s and 40s.

After collaborating in the business club, each suspect moved on to positions as executives at private equity management companies and listed firms, performing work related to public tender offers and M&A. Investigators found that during their work over the past five years, they repeatedly shared favorable, undisclosed information about five different stocks obtained through their work.

The task force said that on this day, they carried out an extensive search and seizure of over 20 locations, including suspects' homes and offices, securing on-site evidence related to the case. At the same time, the Securities and Futures Commission implemented a payment suspension on a suspect's securities account holding illicit gains acquired through the use of undisclosed information, in accordance with the Capital Markets Act. The authorities explained that this pre-emptive action would ensure the full recovery of all illegal gains.

A spokesperson for the Joint Task Force stated, "Rather than accessing information as corporate insiders, the suspects used undisclosed information obtained during M&A work involving the target companies. We will strive to expand investigations into this type of case based on the circumstances of this incident."

Over 20 billion won in illicit gains estimated over five years

The main suspects used this information for their own stock trades and also shared it with family and acquaintances so they, too, could trade stocks using it. According to the task force, these individuals and their family members or acquaintances purchased the relevant stocks before the information was released to the market. After the information became public and share prices rose, they sold the stocks at high prices, ultimately gaining more than 20 billion won in total illicit profits.

An official stated, "We have been investigating for two years, and as we expanded the scope through extensive tracking of funds, transaction analyses, and social network investigations, we were able to confirm personal connections among the suspects. The search and seizure will be used to verify the facts and corroborate evidence with statements."

The official added, "This case is highly significant because it is not a one-off deviation by an individual, but a long-standing pattern of information sharing within a secretive cartel. The source of information was professional personnel obligated to the highest confidentiality, whose work involved M&A. Furthermore, the information was spread to family and acquaintances, resulting in a broad expansion of those engaged in unfair trading activities."

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