Prosecutors have launched a compulsory investigation into a suspected stock manipulation case worth more than 100 billion won involving financial experts and others.
According to legal circles Tuesday, the Financial and Securities Crime Joint Investigation Division of the Seoul Southern District Prosecutors' Office, led by Chief Prosecutor Shin Dong-hwan, raided KB Securities, NH Investment & Securities, and Kyobo Securities that day on charges including violations of the Capital Markets Act.
The case came to light when the Securities and Futures Commission of the Financial Services Commission (FSC) filed complaints in March against 11 individuals, including a wealthy financier, a financial company employee, and a minority shareholder activist, as well as four corporations.
They are suspected of manipulating the share price of DI Dong Il, a KOSPI-listed company with low trading volume due to a shortage of floating shares, by mobilizing funds from corporations they operated and loans from financial companies.
The investigation also found that they pressured DI Dong Il's management under the pretext of a minority shareholder campaign to sign a trust agreement for the acquisition of treasury stock, then managed the share price to attract investors. At the time, the suspects' buy orders were found to have reached about one-third of total trading volume.
The case has drawn particular attention as the first stock manipulation "ruin and disgrace" case handled by the joint response team, which was launched after President Lee Jae-myung repeatedly sent the message that "stock manipulation leads to ruin and disgrace," declaring his commitment to eradicating unfair trading.
Prosecutors had earlier conducted a search of NH Investment & Securities and DI Dong Il on Aug. 28.
