"Unprecedented Large-Scale Market Manipulation... No Remorse Shown," Court Says
La Deok-yeon (43), the head of an investment advisory firm identified as the main culprit behind the SG (Soci?t? G?n?rale) Securities-induced market crash, was sentenced to 25 years in prison.
The Seoul Southern District Court Criminal Division 11 (Presiding Judge Jeong Do-seong) on the 13th sentenced La to 25 years in prison, a fine of approximately 146.5 billion won, and a confiscation order of about 194.4 billion won on charges including violations of the Capital Markets Act and the Act on the Regulation and Punishment of Criminal Proceeds Concealment. La, who had been released on bail, was taken into custody in court on the same day.
Regarding the crash caused by SG (Soci?t? G?n?rale) Securities, CEO Ra Deok-yeon of investment consulting firm H, suspected of leading stock price manipulation. Photo by Yonhap News
La’s close associates, Byeon Mo and Ahn Mo, who were also tried together, were sentenced to 6 years and 3 years and 6 months in prison respectively and were detained in court.
The court criticized the crimes committed by La and others as "an unprecedented large-scale market manipulation," stating that "many innocent investors suffered irreparable losses."
It added, "Despite planning and leading the entire criminal act, La completely denies the charges and shows no remorse," and pointed out that "the nature of the crime is extremely serious."
La and others were arrested and indicted in May 2023 on charges of manipulating the stock prices of eight listed companies by prearranging buying and selling prices from May 2019 to April 2023, inflating the stock prices, and then selling large volumes to pocket about 737.7 billion won. This was the largest detected stock price manipulation case in history.
They are also charged with receiving about 194.4 billion won in fees under the pretense of investment management without registering with financial authorities from January 2019 to April 2023, and hiding the same amount of fees in nominee accounts.
The court did not specify the exact amount of illicit gains La obtained, stating that it would exceed several hundred billion won. The difficulty in calculating the amount was attributed to various external factors during the period of manipulation, such as COVID-19 and the Ukraine war.
The SG Securities-induced market crash occurred on April 24, 2023, when a large volume of sell orders flooded the SG Securities counter, causing the stock prices of eight companies including Dow Data to plummet.
Following suspicions of market manipulation, prosecutors launched an investigation and indicted over 50 participants including La.
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