Stock Expert Who Sold Shares After Recommending Them on Broadcast Sentenced to 2 Years in Prison in First Trial

The Court: "Stocks Purchased in Advance, Sold Entirely After Being Recommended on Broadcast... Constitutes 'Scalping'"

A stock expert was sentenced to prison in the first trial for selling stocks after recommending them on a TV broadcast.

The Seoul Southern District Court Criminal Division 11 (Chief Judge Jeong Doseong) sentenced Song Mo (34), who is accused of violating the Capital Markets Act, to 2 years in prison and a fine of 30 million won on the 14th.

The court stated, "The defendant traded most of the stocks just a few days before appearing on the broadcast, and after recommending the stocks on the show, sold all of them within 10 days, which corresponds to 'scalping' behavior."

Scalping refers to an investment technique involving continuous short-term trading every 2 to 3 minutes, or an act where an investment advisor buys stocks with their own money just before recommending a specific stock and sells them for a profit when the price rises.

Song was indicted for recommending 63 stocks that he had purchased in advance while appearing on a stock-specialized broadcast operated by an economic media outlet from November 2020 to August last year.

He is also accused of raising about 15.1 billion won from 85 investors by promising principal guarantees without authorization from January 2018 to July last year and investing in stocks.