A so-called "finfluencer" (finance + influencer) who repeatedly engaged in front-running stock trades targeting investors and made an illicit profit of approximately 2.2 billion won has been brought to trial.
The Financial and Securities Crime Joint Investigation Division of the Seoul Southern District Prosecutors' Office (headed by Chief Prosecutor Ahn Changjoo) announced on the 25th that it had indicted Mr. A, the operator of a stock-focused Telegram channel, on charges of violating the Capital Markets Act. In addition, four acquaintances, including Mr. A's mother and a friend, who assisted the crime by providing borrowed-name accounts and funds, were indicted without detention on the same charges.
Mr. A operated a Telegram channel with more than 36,000 subscribers and, between April 2018 and August 2023, is alleged to have made about 2.2 billion won through 482 instances of front-running involving 306 different stocks.
He built trust by exaggerating or falsifying his credentials, then purchased specific stocks in advance using borrowed-name accounts. He would post recommendations on his channel such as "Buy this stock," thereby inducing ordinary investors to buy. When the stock price surged, he immediately sold his holdings to realize a profit.
Stock price fluctuation trend before and after recommendation by Mr A. Provided by Seoul Southern District Prosecutors' Office
According to the investigation, 80% of all trades were made within one hour before the recommendation, and 60% of the stocks were sold within one minute after the recommendation post. Most of the remaining shares were also sold within 30 minutes before the post, revealing a repeated pattern of "sharp rise immediately after recommendation, followed by a quick decline."
Mr. A used 17 accounts under his own and accomplices' names and operated the Telegram channel using overseas numbers, including from Vietnam, in a meticulous attempt to conceal the crime. Prosecutors have requested the forfeiture and preservation of the entire criminal proceeds.
The Seoul Southern District Prosecutors' Office stated, "We will respond with zero tolerance to financial and securities crimes that exploit investor losses for massive profits," and added, "We will continue to cooperate with the Financial Services Commission and the Financial Supervisory Service to establish fairness and soundness in the securities market."
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