[Alpha Biz= Paul Lee] The Financial Services Commission’s Securities and Futures Commission (SFC) announced on May 21 that it has decided to report to prosecutors executives of VIVOZON Pharma (082800) and electronic components manufacturer IM (101390) for violations of the Capital Markets Act involving insider trading and unfair trading practices.
According to the SFC, some executives and employees of VIVOZON Pharma exploited undisclosed, material, positive information related to new drug development during February and March 2023. They purchased shares shortly before the related public disclosure and sold them after the stock price rose, generating illicit profits amounting to several hundred million won. An internal investigation revealed inadequate physical separation of disclosure and accounting teams’ workspaces, which allowed sensitive management information to be easily exposed.
Executives of IM engaged in market manipulation by issuing false announcements about new themed businesses. In June 2023, they falsely announced plans to pursue overseas mineral development unrelated to their core business. Although only formal memorandums of understanding (MOUs) were signed with foreign joint ventures, the company exaggerated the possibility of acquiring mining rights and high-profit potential in press releases.
Holding shares in the company, these executives drove the stock price up by 24% in a short period through false disclosures and media reports, obtaining illicit profits worth several billion won. Investigations found no actual mining rights acquisition, economic feasibility assessment, or investment execution related to the announced new business.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
