The CEO of a KOSDAQ-listed company, who obtained non-public material information about negative developments in advance and sold shares to gain illicit profits amounting to hundreds of millions of won, has been brought to trial.
The Financial Investigation Division 1 of the Seoul Southern District Prosecutors' Office (Chief Prosecutor Lim Sejin) announced on September 23 that it had indicted, without detention, the CEO of a KOSDAQ-listed company, identified as Mr. A, on charges of violating the Capital Markets Act by using undisclosed information.
In December of last year, Mr. A learned in advance that a U.S. court had rendered a verdict ordering his company to pay 452 million dollars (approximately 633.7 billion won) in damages in a lawsuit filed by a competitor. Mr. A is accused of selling company shares held under his and his spouse's names before this negative, non-public material information was disclosed, thereby reaping illicit gains of 999.61 million won.
On the same day, two company executives who used the same negative, non-public material information to sell company shares and gained illicit profits exceeding 100 million won, as well as a company disclosure officer who obtained illicit profits of over 40 million won, were summarily indicted.
The prosecution explained that, in the case of the two company executives, it applied mitigation provisions under the Capital Markets Act, taking into account that they submitted statements of voluntary surrender to the prosecution seven days after the stock sales.
A prosecution official stated, "We plan to thoroughly recover criminal proceeds by seeking fines and confiscation orders that exceed the illicit gains obtained through the offenses."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
