Securities and Futures Commission Reports and Refers Undisclosed Information Users and Market Manipulators to Prosecution

Individuals who gained unfair profits through the use of undisclosed information or market manipulation have been referred to the prosecution.

Kwon Daeyoung, Chairman of the Securities and Futures Commission (Vice Chairman of the Financial Services Commission), is speaking at the regular meeting held at the Government Seoul Office in Jongno-gu, Seoul on August 27, 2025. Photo by Cho Yongjun

On September 30, at its 17th regular meeting, the Securities and Futures Commission of the Financial Services Commission notified the prosecution of individuals who acquired shares and management rights of listed companies, as well as those negotiating partial share acquisition contracts and any recipients of such information, on charges of utilizing undisclosed material information prohibited under the Capital Markets Act.

According to the Securities and Futures Commission, C, the representative of company B, which was negotiating a contract to acquire a portion of the shares from a party set to take over the shares and management rights of listed company A, passed on information about the share transfer contract to acquaintances D and E, who then used it for trading A's stock. As a result, C, D, and E obtained unfair gains worth several hundred million won.

A full-time investor who gained unfair profits by manipulating prices on an alternative trading system (NXT) was also reported to the prosecution. F is alleged to have alternated between the Korea Exchange and an alternative trading platform, submitting orders to manipulate the price of company G shares, driving up the price and earning hundreds of millions of won. F used accounts belonging to family and acquaintances to prevent forced sales of shares pledged as loan collateral, and focused manipulation orders on the alternative trading system, where a thin order book made it easy to raise the share price with relatively small buy orders.

The Securities and Futures Commission also reported to the prosecution the largest shareholder and CEO of a real estate development company for violating the Capital Markets Act's prohibition on market manipulation. I, the largest shareholder and CEO of company H, is confirmed to have used 11 accounts belonging to family and acquaintances to submit manipulative orders such as high-priced purchases and interventions at market close on low-liquidity stocks over a period of two years and five months, raising their share prices and earning hundreds of billions of won. It was also found that I acquired more than a 5% stake during the manipulation process, thereby incurring a large shareholder reporting obligation, which was not fulfilled.

An official at the Financial Services Commission stated, "Market manipulators often target stocks with low trading volumes; therefore, if a low-volume stock continues to rise in price without a clear reason, there is a possibility that price manipulation may be involved, so caution is advised," adding, "The authorities will respond strictly to unfair capital market transactions using undisclosed information and to acts of market manipulation."

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