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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] South Korean prosecutors have launched a forced investigation into an alleged large-scale stock manipulation scheme involving more than KRW 100 billion in funding.
According to legal sources on May 28, the Seoul Southern District Prosecutors’ Office executed search and seizure warrants at NH Investment & Securities and DI Dongil as part of the probe.
Authorities suspect that individuals including a securities firm employee, a corporate executive, and other participants used dozens of accounts to conduct wash trades and matched orders to manipulate stock prices. The group allegedly mobilized over KRW 100 billion in funds, including corporate capital and financial loans, and generated illicit gains estimated at around KRW 40 billion.
The case is reported to be the first investigation under the government’s newly established joint task force aimed at eradicating stock manipulation.
Previously, the Securities and Futures Commission under the Financial Services Commission referred 11 individuals and four related entities to prosecutors on charges of market manipulation and unfair trading practices under the Capital Markets Act.
During the alleged manipulation period, shares of DI Dongil reportedly doubled, with the group’s trading volume accounting for roughly one-third of total market activity.
NH Investment & Securities stated that the employee in question had conducted standard operations under a trust agreement related to treasury stock transactions and that the company is cooperating fully with the investigation.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
