KB Securities, NH Investment & Securities, Kyobo Securities targeted

[Herald DB]
[Herald DB]

Prosecutors have launched a criminal investigation into a stock manipulation case worth around 100 billion won ($65.6 million) allegedly involving financial professionals and others.

The Seoul Southern District Prosecutors' Office's joint financial and securities crime investigation unit, led by chief prosecutor Shin Dong-hwan, raided KB Securities, NH Investment & Securities and Kyobo Securities on Thursday on charges including violations of the Capital Markets Act, according to legal sources.

The case came to light in March when the Financial Services Commission's Securities and Futures Commission filed complaints against 11 individuals — including a wealthy investor, employees of financial firms and a minority shareholder activist — along with four corporations.

The suspects are accused of targeting DI Dongil, a Kospi-listed company with a limited float and low daily trading volume, and manipulating its share price using funds from corporations they operated and loans from financial institutions.

They are also suspected of pressuring DI Dongil's management under the guise of a minority shareholder campaign, compelling the company to enter into a trust agreement to buy back its own shares, then managing the share price to lure in investors.

At the time, the suspects' buy orders accounted for roughly one-third of total market trading in the stock.

The case has drawn attention as the first taken up under the "stock manipulation ruin" initiative — a joint task force launched after President Lee Jae-myung called for a crackdown on unfair trading practices.

Prosecutors had previously raided NH Investment & Securities and DI Dongil on May 28.


dingdong@heraldcorp.com