Joint Response Team for Stock Price Manipulation to Be Led by FSS "Grim Reaper" Lee Seungwoo

Appointed as Head of Joint Response Team Launching on the 30th
Joint Response Team to Respond Swiftly from Surveillance to Compulsory Investigation
Market Surveillance System Shifts from 'Account-Based' to 'Individual-Based' Approach

Lee Seungwoo, Deputy Governor for Disclosure Investigation at the Financial Supervisory Service (FSS), will lead the "Joint Response Team for Eradication of Stock Price Manipulation," which has been established by the Financial Services Commission (FSC), FSS, and Korea Exchange. An FSS executive with expertise in unfair trading investigations will head the organization, and the entire FSS Investigation Bureau 3 will be dedicated to the team. Since the team will conduct both market surveillance and compulsory investigations, directly examining individuals, there are expectations for swift investigations into unfair trading practices.

According to financial authorities on July 25, Lee Seungwoo was appointed as the head of the Joint Response Team for Eradication of Stock Price Manipulation, which will launch on July 30, following the retirement of Ham Yongil, FSS Deputy Governor for Capital Markets and Accounting, upon the expiration of his term. Lee Seungwoo joined the Securities Supervisory Board in 1995 and has since served in the FSS Financial Investment Inspection Bureau, Special Investigation Bureau, Investigation Planning Bureau, and Capital Market Investigation Bureau. He is highly regarded for earning the trust of staff in the capital markets division. An FSS official stated, "He is a person who has proven his expertise and competence in the field of unfair trading investigations."

There were some differing opinions regarding who should lead the team after Ham Yongil's retirement, but it was ultimately decided that the FSS Deputy Governor would take charge. This decision was based on the assessment that the FSS is an organization with both expertise and experience in unfair trading investigations. While the authority for compulsory investigations lies with the FSC, the FSS has been leading the actual investigation work.

The Joint Response Team is composed of the Rapid Review Team (12 members from the Korea Exchange), the General Investigation Team (18 members from the FSS), and the Compulsory Investigation Team (4 members from the FSC). The majority of the team is from the FSS, with the entire Investigation Bureau 3 assigned to the task. The Rapid Review Team is responsible for determining whether unfair trading has occurred, while the General Investigation Team handles fund tracing and data analysis. The FSC, which holds the authority for compulsory investigations, will conduct forensic analysis and execute search and seizure operations.

In the past, this process involved the Korea Exchange first conducting market surveillance and then transferring the case, which resulted in significant delays before sanctions could be imposed. However, the Joint Response Team will work together in the Korea Exchange offices, enabling them to investigate unfair trading cases in a more integrated manner. As a result, investigations into unfair trading such as stock price manipulation are expected to proceed much more quickly.

Notably, the Korea Exchange's market surveillance system will shift from an account-based to an individual-based approach. Currently, the Korea Exchange conducts market surveillance based on accounts without using personal information, due to concerns about personal data leakage. This approach makes it difficult to identify connections between individuals and results in a broad monitoring scope. The Joint Response Team plans to encrypt resident registration numbers and link them with account identification numbers to prevent personal information leaks. This will reduce the number of monitoring targets by about 39%, and crimes involving the splitting of funds across multiple accounts will also be detected.

The Joint Response Team will begin market surveillance immediately upon launch and aims to detect unfair trading practices. It is expected that the first case of unfair trading detected by the team will be announced within the year at the latest.