"Place Orders When the Market Opens"... Gang Referred to Prosecutors for Making 6 Billion Won Through Stock Price Manipulation

Repeatedly placed more than 9,000 orders intended to manipulate the share price
Share price rose from the 3,000-won range to the 10,000-won range in just five months

A group that manipulated the share price of a KOSDAQ-listed company using 147 nominee accounts and made 6 billion won in illicit gains has been caught by police.

Messages exchanged by a stock price manipulation ring linked to a KOSDAQ-listed company. Seoul Metropolitan Police Agency.

On Nov. 12, the Financial Crimes Investigation Unit of the Seoul Metropolitan Police Agency's Metropolitan Investigation Division said it had referred 25 people, including the CEO of KOSDAQ-listed Company A, gang members, loan sharks and securities company employees, to the Seoul Southern District Public Prosecution Office without detention on suspicion of stock price manipulation under the Capital Markets Act.

The case began with allegations that the share price of Company B, a KOSDAQ-listed company in the education sector, had been manipulated. Last year, the Financial Intelligence Unit of the Financial Services Commission sent police a report stating that it suspected stock price manipulation at Company B, and police launched an investigation.

The alleged scheme ran from October 2022 to June 2023. Using 147 nominee accounts, the suspects repeatedly placed a total of 9,396 orders intended to manipulate the share price, including 841 trades that inflated trading volume or were arranged in advance and 3,051 high-priced buy orders.

As a result, Company B's share price surged from 3,690 won in April 2022 to 10,440 won in April the following year. Trading in Company B's shares is currently suspended.

Police believe that over the course of eight months, the suspects bought and sold 31 million shares of Company B, generating transactions worth approximately 120 billion won. Investigators confirmed that the two alleged ringleaders each made 3 billion won in illicit gains, for a total of approximately 6 billion won.

During the investigation, police conducted searches and seizures at the Korea Exchange, the suspects' residences and offices, and tracked accounts, securing a substantial amount of evidence. In particular, they established the full scope of the case by uncovering how order placers, account providers and funders colluded and took part in the stock price manipulation in an organized manner.

Ha Seungwoo, head of Team 2 at the Financial Crimes Investigation Unit, said, "We will respond firmly and strictly to acts that disrupt the capital markets by exploiting losses suffered by numerous individual investors to make enormous sums of money. We will work to establish transparency and soundness in the securities market."

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