Prosecutors indicted eight people for manipulating the stock prices of Joongang Advanced Materials (formerly Joongang D&M) and QUANTAPIA, two KOSDAQ-listed companies, to provide escape funds for Lee In-gwang, the chairman of S.M.O., the main perpetrator of last year's 'Lime incident.'
Despite the intriguing narrative that Lee's subordinates allegedly dove into price manipulation to fund the chairman's living expenses while he is fleeing overseas, and that the indictment list includes the father-in-law of actor and singer Lee Seung-gi, there was another point that drew attention in the KOSDAQ industry.
The names listed in the indictment have been involved for a very long time, described as stagnant. A KOSDAQ industry insider noted, 'Looking back, the MZ generation, which should be actively participating, is nowhere to be seen; only those in their 40s and 50s are around,' and joked, 'Once the players all grow old and die, there will be no one left to manipulate stock prices.'
They state, 'That said, the younger generation is not completely abstaining from price manipulation.' The 2030 generation, known as the MZ generation, is said to be actively engaged in international stock markets in the U.S. and Hong Kong, as well as in the cryptocurrency market.
While the financial authorities' scrutiny of the stock market is intensifying, the regulations on international stock markets and the cryptocurrency market are relatively lenient, allowing for more freedom of activity, according to them.
Additionally, in the case of U.S. stocks or cryptocurrencies, the fluctuation ranges are much greater than those of domestic stocks, leading to significantly higher expected revenue based on strategies, prompting the younger generation to shift their focus there.
The stock price manipulation incident involving Young Poong Paper that stirred public attention two years ago was similar. Many of those involved in the case were in their 40s and 50s. The individual who oversaw the price manipulation was in his late 50s, while most of those responsible for fund management and trading were in their late 40s.
Recently, corporate raider Hong Seok-jong, born in 1970 and in his mid-50s, has once again found himself in the spotlight due to the drastic rise in Sangji Construction's stock price. Hong is suspected to be behind the stock manipulation incident involving Meiji that occurred in the mid-2010s. A person who claims to have worked with Hong stated, 'The stock manipulation group led by Hong has been involved in about ten cases of stock manipulation over the past decade.'
Another insider explained, 'Currently, about 25 to 30 listed companies can be seen as being under Hong's influence.'
If the informant's claims are true, Hong acted in the role of a kind of designer, collaborating with investors to ‘lend’ funds and those termed 'players' who conduct price manipulation through strategic trading. Also mentioned in the controversy surrounding the political theme stocks of Sangji Construction, where price manipulation suspicions have surfaced, are individuals with ties to corporate raider allegations and a presumed family member of a moneylender. One individual was born in 1977 and the other in 1975.
It is reported that Chairman Lee Mo, who was entangled in a political scandal, is still actively involved and is suspected of being the actual owner of a listed company B. Chairman Lee was born in 1958.
In contrast, younger players have disappeared from the KOSDAQ market. Individuals met while investigating Hong's group testify that the MZ generation players, who once proliferated in the 2010s, are now leaving the KOSDAQ market. They explained that it is becoming increasingly challenging to artificially manipulate stock prices in the domestic market, and with the increased possibility of apprehension, they are turning their attention to other markets.
They are reportedly heading towards the cryptocurrency market and the U.S. stock market. An insider from the cryptocurrency sector stated, 'Most of the forces active in the cryptocurrency market belong to the MZ generation,' adding, 'While it is uncertain if they have participated in the stock market, transaction tracking is virtually impossible, and they can achieve high revenue, so the number of active participants is gradually increasing.'
According to the securities sector, the U.S. Securities and Exchange Commission (SEC) is increasingly requesting social media (SNS) related materials concerning Korean individuals involved in price manipulation. Relations explain that there have been more cases of boosting stocks by recommending U.S. small-cap stocks through domestic Telegram channels.
A market insider noted, 'The SEC requests information about entities related to stock manipulation operating from Korea on SNS to the Financial Supervisory Service every year,' adding, 'While the volume of requests is steadily increasing, I understand that this year has seen a particularly significant rise.'
A president of a securities firm stated, 'Indeed, there has been an increase in the amount of information requested by the SEC through the FSS,' adding, 'However, because they are located far overseas, it seems there are limitations to the investigation. This leads me to believe that they are becoming interested in U.S. stocks, which have a lower chance of exposing those intending to manipulate prices.'