Operator of Stock Leading Room Embezzling Over 300 Million Won Through Front-Running Arrested and Indicted

Seoul Southern District Prosecutors' Office Photo by Yonhap News

[Asia Economy Reporter Yoo Byung-don] The Seoul Southern District Prosecutors' Office Financial Investigation Division 1 (Chief Prosecutor Lee Seung-hyung) announced on the 8th that they have arrested and indicted Mr. A, the operator of a stock leading chat room, on charges of violating the Capital Markets Act.

According to the prosecution, Mr. A is accused of making an unfair profit of 364 million KRW by engaging in front-running from March to October this year, a period of about seven months. He bought stocks of certain companies in advance before recommending them to members of the stock leading chat room he operated, and then sold them after the stock prices rose. The investigation revealed that Mr. A purchased 28 stocks in advance, posted them as recommended stocks to members, and sold them as the stock prices rose due to members' purchases, earning an average daily trading profit of 24.2 million KRW.

The prosecution received the case from the Financial Services Commission and the Financial Supervisory Service in October and has been investigating since. Starting with a search and seizure of Mr. A's office and other locations in the same month, the court issued an arrest warrant on the 22nd of last month. A prosecution official stated, "We will continue to cooperate with financial authorities to thoroughly investigate crimes involving the use of stock leading chat rooms that deceive ordinary investors, strictly punish offenders, and relentlessly track and confiscate criminal proceeds."