Securities and Futures Commission Files Criminal Complaint With Serious Crime Investigation Agency Against Insiders Using Material Nonpublic Information
Securities and Futures Commission meeting on Oct. 28
Suspected of making illicit gains using material nonpublic information
The Securities and Futures Commission filed a criminal complaint with the Serious Crime Investigation Agency and notified it about participants in a rights offering and others suspected of making illicit gains by using material nonpublic information related to a large-scale rights offering involving a change in management control.
On Oct. 28, the commission said at its regular meeting that executives and employees of another listed company and its affiliates, as well as their acquaintances, were suspected of learning or receiving related information through their work and using it to trade shares in connection with a rights offering by listed Company A. Authorities estimated their illicit gains at approximately 1.25 billion won.
The Financial Services Commission said it had confirmed indications of wrongdoing through search and seizure operations, digital forensic analysis and questioning.
Separately, the commission notified the Serious Crime Investigation Agency about an executive of an unlisted company and recipients of information suspected of using material nonpublic information related to the transfer of management control of listed Company B.
The executive allegedly passed the material nonpublic information to an acquaintance, who allegedly used it to trade shares and then passed it on to three relatives. The acquaintance's illicit gains amounted to approximately 100 million won. The three relatives were subject to fines for alleged market-disrupting activities.
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The Financial Services Commission said that under the Capital Markets Act, company executives and employees, as well as parties to contract negotiations, may face criminal penalties if they use material nonpublic information learned through their work or allow others to use it.
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