The Joint Response Team for Eradicating Stock Manipulation has searched Alpha AI, a KOSDAQ-listed company, on suspicion of reaping some 20 billion won in illicit profits through stock manipulation.
According to financial industry sources on the 10th, the task force launched searches that day targeting Alpha AI's (043100) headquarters in Pyeongtaek, Gyeonggi Province, as well as the residences of the company's current and former executives.
Alpha AI saw its share price rise sharply last year after disclosing plans to enter multiple new artificial intelligence (AI) businesses. However, in its first-quarter report this year, the company said it "has not yet begun pursuing these businesses in earnest." It faces allegations of making false disclosures, having stated that newly raised funds would be invested in the new AI businesses while the actual use of the money differed.
The suspects are also alleged to have manipulated Alpha AI's share price through separate accounts, sources said. In this process, investigators are also examining circumstances suggesting that the acquirer and former executives colluded, according to sources.
Earlier, in April this year, Alpha AI disclosed that it had received a "disclaimer of opinion" on its business report from its auditor, due to limitations on the scope of the audit and uncertainty over its ability to continue as a going concern. Delisting from the KOSDAQ market was subsequently decided, but trading is currently suspended following the company's appeal.
In addition, the task force has detected and investigated more than 10 cases over its first year since launch — including long-term price manipulation by the super-rich, insider trading by a senior securities firm executive, and front-running by a reporter — and referred them to prosecutors. At an operational review meeting on the 8th of this month, the team said it is currently investigating numerous cases, including price manipulation and front-running, and announced its policy of securing evidence through searches in major cases.
