Recently, the investigation and financial authorities have been aggressively investigating allegations of stock price manipulation and unfair trading or actively disclosing the results of investigations. In the market, this movement by the authorities is considered related to the severe punishment promises for disrupting the capital market made by the main presidential candidates. As the organizational restructuring of the authorities is also included in the election pledges, there are observations that there is a need to extensively promote the investigation contents and results.
The investigation and financial authorities are currently investigating allegations of insider trading involving executives of HYBE. The prosecution has conducted a search and seizure at HYBE, and the Financial Supervisory Service has launched an investigation into allegations of fraudulent trading by Bang Si-hyuk, chairman of HYBE.
Previously, the Securities and Futures Commission of the Financial Services Commission prosecuted executives of IM for artificially inflating stock prices through false announcements of overseas mineral development projects and reported that employees of Biocon Pharma engaged in unfair trading using insider information.
Although the investigation into stock price manipulation by the authorities is not a recent development, with various related news circulating just before the election, the industry is busy interpreting the implications. A source in the financial investment industry noted, "Some contents, like the Financial Supervisory Service's investigation into HYBE, are difficult to know unless insiders leak them intentionally."
In the announcement of sanctions by the Securities and Futures Commission, the financial authorities previously stated that they would actively disclose the details of actions taken "to raise market awareness." Considering this, the market reacted that they are revealing even minor accomplishments that they would not have disclosed in the past. A market source said, "The level of sanctions against IM and Biocon Pharma this time is the kind of size that the Securities and Futures Commission would not have bothered to disclose in the past."
As a result, the industry is understanding the recent actions of investigative agencies and financial authorities in connection with the election. Since each presidential candidate has promised to strengthen order in the capital market, it is said that the authorities are proactively promoting their efforts and achievements.
Lee Jae-myung, the presidential candidate from the Democratic Party of Korea, has often mentioned strengthening punishment for stock price manipulators. In an interview with YouTube channel Spicks on the 1st of this month, he said, "If one manipulates stock prices or trades, we will deal with it with the most severe legal maximum punishment," and added, "We will create a special investigation team for constant monitoring and significantly increase personnel to investigate any issues."
Kim Moon-soo, the presidential candidate from the People Power Party, also visited the Korea Exchange on the 22nd of last month and stated, "We will impose penalty surcharges for acts such as unfair transactions and accounting fraud," further noting, "We will strive to enhance the stability and credibility of the capital market." He added, "We will restrict participation in the stock market by economic criminals and strengthen market monitoring and specialized investigative personnel."
In addition, candidate Lee Jae-myung has proposed structural reforms for the prosecution and financial authorities. There are concerns that there could be a high-intensity reform at the level of disbandment. There are also discussions on reviewing plans to reallocate powers and organizations within the financial authorities.
The financial authorities stated that the investigation into the capital market is being conducted regardless of the election. A representative from the financial authorities remarked, "We do not strengthen the investigation or publicity regarding stock price manipulation cases according to any specific guidelines or purposes," adding, "As investor interest in stock price manipulation has increased, related matters are becoming more visible than before."