South Korean regulators refer insiders to investigators for illegal trading

The Securities and Futures Commission (SFC) has referred several individuals to the Serious Crime Investigation Agency for using undisclosed information to gain approximately 1.25 billion won in illicit profits. The investigation revealed two major cases involving the misuse of non-public information regarding large-scale rights offerings and management changes.

In the first case, executives from a listed company and their associates allegedly exploited information about a major rights offering involving a change in management control. They anticipated that news of celebrity participation, improved financial status, and new business ventures would drive stock prices up.

In a second case, a director of an unlisted company allegedly leaked non-public information regarding the acquisition of a listed company's management rights to an acquaintance. This information was subsequently passed to three relatives, who used it to trade stocks and gain roughly 100 million won. While the primary actors face criminal referral, the secondary recipients were issued fines for market disturbance activities.