Securities Deliberation Committee, Capital Markets Act Violation Charges
Pre-trade Followed by Recommendation → Profit Realization
"Going to the OO theme, it's surging right now."
The financial authorities have swiftly reported to the prosecution unfair practices related to illegal stock leading rooms on social networking services (SNS) involving famous finfluencers (finance + influencers).
On the 4th, the Financial Services Commission's Securities and Futures Commission held its 21st meeting and resolved to promptly report to the prosecution for violations of the "Capital Markets and Financial Investment Services Act (Capital Markets Act)." This was previously discussed once at the 16th meeting in September.
The problematic finfluencers operated leading rooms on SNS, pre-purchasing stocks and then recommending those stocks. When buying demand flowed in or the stock price rose, they sold the stocks to realize profits across hundreds of stocks.
This case is the first application of the "SNS Utilization Leading Room Case Handling Plan" prepared by the "Unfair Trading Investigation and Deliberation Agency Council," which includes related agencies such as the Financial Services Commission, prosecution, Financial Supervisory Service, and Korea Exchange. Since leading room cases using SNS make it easy to destroy evidence and flee, the focus was on reducing prior communication stages between authorities and suspects and quickly transferring cases to investigative agencies after investigation.
The Financial Services Commission explained, "We used SNS leading room monitoring and big data analysis techniques to select leading rooms with a high likelihood of illegal activity and promptly started investigations," adding, "This case uncovered suspicions involving more than 700 stocks through trading analysis by IT specialized investigators."
They further explained, "Regarding pre-trading cases using SNS leading rooms, we ensured that key evidence of unfair trading acts is not destroyed by immediately reporting and notifying investigative agencies."
The financial authorities plan to continuously monitor unfair trading acts related to SNS leading rooms and strictly take action against unfair trading.
Meanwhile, investors should not be misled by baseless information or rumors and must verify the source and basis of information. According to the revised Capital Markets Act in August this year, only investment advisory firms registered with the Financial Services Commission can provide investment information through two-way channels, so investors should be cautious of illegal operations and unfair trading in leading rooms.
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