Prosecutors have indicted nine people on charges of manipulating the stock price of a furniture company listed on the KOSDAQ. Among them were a stock manipulation operative who claimed to be the protagonist of the movie "The Scam," a securities firm executive, a wealthy figure known as the husband of a broadcaster, and a former soccer player.
The case marks the first time the leniency program—a self-reporting penalty reduction system—has been applied to investigations of unfair trading in capital markets, such as stock manipulation. The program had previously been used mainly in fair trade collusion cases, prompting forecasts that its use could become more widespread.
The Joint Investigation Unit for Financial and Securities Crimes at the Seoul Southern District Prosecutors' Office said Wednesday that it had investigated a stock price manipulation case involving a KOSDAQ-listed company, indicting and detaining three ringleaders while indicting six accomplices without detention or through summary proceedings.
According to prosecutors, the group bought and sold more than 28.9 billion won worth of shares in the KOSDAQ-listed company through borrowed-name securities accounts from December 2024 to April of the following year, driving up the stock price and reaping at least 1.4 billion won in illicit gains.
The case began when A, a corporate raiding specialist who claims to be the protagonist of the 2009 film "The Scam," planned a price manipulation operation with B, a current securities firm executive, serving as the operative. They recruited a wealthy figure, C; a financier, D; and a stock manipulation operative, E, as partners in the scheme.
C and D provided 3 billion won in cash, borrowed-name accounts, and burner phones for use in the price manipulation. The accomplices who received these set out to commit the crime, planning to drive up the furniture company's stock price—then in the 1,900-won range—to more than 7,000 won at most before selling it off to divide the profits. The company's stock price subsequently surged to 4,105 won in February of last year.
This is the first case in which an investigation into stock price manipulation was launched based on a "self-reporting penalty reduction" (leniency) application submitted by a self-reporting individual to the Supreme Prosecutors' Office. Through this, prosecutors were able to uncover the substance of a stock manipulation crime in just three months—a process that usually takes one to two years or more.
"The crime of 'stock price manipulation' is a crime that harms ordinary people in large numbers, undermining the order of the stock market and posing a serious threat to the national economy," a prosecution official said. "We will make our best efforts to deprive criminals of the source of their proceeds, including not only confiscating the illicit gains obtained through price manipulation but also seizing the 'principal' provided for the manipulation to the very end."
