South Korea's Financial Services Commission reported enforcement action by the Securities and Futures Commission in two separate cases involving suspected misuse of material nonpublic information linked to changes in corporate control. Suspects were referred to the Serious Crimes Investigation Agency, while three indirect recipients of information in the second case received administrative fines for alleged market disruption. In the first case, participants in a listed company's large share placement and their associates allegedly obtained about KRW 1.25 billion in illicit gains using information acquired through their work or passed to them. They allegedly expected the planned control change, a prominent person's participation in the share issue and improved funding prospects to lift the company's share price. The second case concerns a director of a company acquiring control of a listed firm who allegedly passed confidential transaction information to an acquaintance. That recipient traded in the listed company's shares and relayed the information to three relatives. The director and initial recipient allegedly obtained about KRW 100 million in illicit gains, while the three relatives allegedly gained a further KRW 100 million collectively. The relatives received fines under market disruption provisions, which allow administrative penalties of up to 1.5 times illicit gains for trading on information passed on by an initial recipient.

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