Former CEO of Listed Company Sentenced to Prison in First Trial for Boosting Stock Price with False Disclosure of "Hiring Zuckerberg's Sister"

A former co-CEO of a KOSDAQ-listed company has been sentenced to prison in the first trial for allegedly making a false disclosure about appointing Mark Zuckerberg's biological sister as an outside director in order to boost the company's stock price.

On October 28, the 13th Criminal Division of the Seoul Southern District Court (Presiding Judge Kim Sangyeon) sentenced former co-CEO A (age 49) of Izmedia, who was indicted for violating the Capital Markets Act, to two years and six months in prison and a fine of 100 million won. B (age 60) was sentenced to two years in prison and a fine of 100 million won. However, the court found them not guilty on the charges of breach of trust.

The court stated, "They misled investors and undermined the transparency and fairness of the capital market," adding, "As a result of their actions, Izmedia's business situation deteriorated irreparably, ultimately leading to its delisting."

A was charged with making a false disclosure in February 2021, claiming to have acquired Izmedia with his own capital when it was actually acquired without capital. B was charged with making a false disclosure about appointing Mark Zuckerberg's sister, Randi Zuckerberg, as an outside director.

They were also accused of causing damage to the company by failing to disclose that they had pledged company shares as collateral while borrowing approximately 6 billion won from a private lender.

Izmedia filed for a provisional injunction to suspend the effectiveness of the delisting decision in October 2023, but this request was dismissed in June last year.