Financial Authorities Launch Intensive Investigation into Unfair Trading of Political Theme Stocks

[Asia Economy Reporter Ko Hyung-kwang] Financial authorities are strengthening investigations into unfair trading of political theme stocks ahead of the general elections.

The Financial Supervisory Service (FSS) announced on the 21st that this year it plans to intensify crackdowns on political theme stocks related to the general elections and on market discipline violations by executives of listed companies to prevent unfair trading in the capital market.

First, using the theme stock monitoring system, they will closely monitor rumors spread through social networking services (SNS), blogs, and communities, as well as abnormal surges in stock prices. If any stocks suspected of unfair trading are found during the monitoring process, they will be promptly investigated and strictly dealt with.

In addition, investigations into market discipline violations by executives of listed companies will be conducted simultaneously. This includes measures to eradicate unfair trading by executives related to no-capital M&A fraudulent transactions, earnings manipulation, and fraudulent transactions linked to disclosure obligation violations.

To actively respond to unfair trading exploiting anonymity, investigations will also be conducted into fraudulent transactions abusing the anonymity of investment associations and illegal activities linked to securities firms' Prime Brokerage Services (PBS).

PBS is a type of derivative product where securities firms provide comprehensive services such as funding loans, securities lending, and advisory to hedge fund managers and receive fees in return.

An FSS official stated, "We plan to closely monitor political theme stocks related to the general elections and promptly investigate and strictly deal with any unfair trading discovered."