CEO of Listed Company, 'Good News' Known in Advance for Nominee Investment... Prosecutors File Charges

The Securities and Futures Commission Resolves to Prosecute at the Regular Meeting on the 13th

On the 13th, the Securities and Futures Commission announced that at its 5th regular meeting, it resolved to file a criminal complaint with the prosecution against CEO A of a listed company for illicitly profiting by using undisclosed favorable information.

CEO A of a domestic listed company obtained undisclosed important favorable information indicating a "sharp increase in operating profit and a turnaround to net profit" during internal reporting from the accounting department. Before the information was made public, A used nominee accounts under the names of their spouse and acquaintances to purchase company shares and illicitly profited.

The suspect continuously traded the company's shares over several years using nominee accounts to evade insider trading regulations. They also failed to fulfill the obligations to report changes in ownership of related shares and to return short-term trading profits.

Executives or major shareholders of listed companies must report to financial authorities within five days from the date of change if they trade company shares on their own account regardless of the name used. Profits (short-term trading gains) obtained by selling (buying) shares within six months after buying (selling) may be subject to return claims.

The financial authorities plan to file charges against A for violating the Capital Markets Act, including the use of undisclosed important information and failure to report ownership status. Additionally, short-term trading profits generated from the suspect's transactions will be ordered to be returned to the company.

The financial authorities stated, "We will thoroughly investigate and strictly take action against unfair trading activities involving executives and employees of listed companies," and added, "Since unfair trading activities involving executives and employees of listed companies continue to be detected, this year we will expand the target audience for education and provide customized training to enhance the effectiveness of education."