The second-generation founder of a pharmaceutical company was reported to the prosecution for selling stocks after obtaining advance knowledge of clinical trial information for a COVID-19 treatment.
On the 17th, the Securities and Futures Commission announced that it had decided to report Mr. C, the second-generation founder of pharmaceutical company A listed on the KOSPI, and holding company B to the prosecution for violating the prohibition on the use of undisclosed important information under the Capital Markets Act.
Company A conducted domestic clinical trials to develop a COVID-19 treatment. However, it failed to meet the efficacy goals of the primary endpoint in Phase 2 clinical trials. Upon learning this, Mr. C sold a large volume of Company A's shares held by holding company B, which is operated by himself and his family, through a block deal before the information was made public in April 2021.
According to the investigation by the Securities and Futures Commission, Mr. C, the actual owner of Company A, was judged to have avoided losses amounting to 36.9 billion KRW by trading using information related to the clinical trial results of the new drug development that he had obtained in advance.
The Commission explained, "Mr. C, the second-generation founder, who concurrently served as president of Company A and CEO of Company B, used internal information he acquired to engage in the use of undisclosed important information," adding, "This is a case where the actual owner of a KOSPI-listed company, who should set an example for participants in the capital market, instead took unfair profits by using internal information not disclosed to the public."
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