South Korea's Financial Services Commission announced that the Securities and Futures Commission took criminal enforcement action in three separate cases involving the alleged use of material nonpublic information and market manipulation. One case was notified to prosecutors, while criminal complaints were filed in the other two. The first case concerns a company executive who allegedly obtained nonpublic information while negotiating to acquire part of a listed company stake and passed it to two acquaintances, generating illicit gains of hundreds of millions of KRW. The second involves a professional investor accused of using family and acquaintances’ accounts to place manipulative orders across the Korea Exchange and alternative trading venue NXT. The investor allegedly concentrated certain orders on NXT to exploit its thinner order book and raise the price displayed in the consolidated quotation system. In the third case, a property developer’s controlling shareholder and chief executive allegedly used 11 accounts held by four parties to place thousands of manipulative orders in a thinly traded stock over two years and five months, producing illicit gains of tens of billions of KRW. The company and executive also allegedly failed to make required substantial shareholding disclosures after their holdings reached at least 5%.
South Korea's Financial Services Commission announces criminal referrals in three unfair trading cases including manipulation on alternative venue NXT
South Korea's Financial Services Commission announced criminal referrals in three separate cases involving alleged misuse of material nonpublic information and market manipulation. The cases include exploitation of NXT’s thin order book and a two-year, five-month manipulation scheme using 11 accounts that allegedly generated tens of billions of KRW in illicit gains.