Financial authorities have decided to drastically raise the current 3 billion won cap on whistleblower rewards in order to eradicate stock price manipulation. The plan is to expand incentives for reporting by paying rewards in proportion to the amount of illicit gains, similar to the United States, where as much as 370 billion won has been paid out to an internal whistleblower.
On the morning of February 3, Financial Services Commission Chairman Lee Eokwon attended the "KOSPI 5000 and Beyond" event held at the Korea Exchange in Yeouido and stated, "We will definitely root out unfair trading."
Chairman Lee stressed, "We will strengthen incentives for voluntary reports from insiders, which are what stock price manipulation rings fear most and what is most effective," adding, "First, we will significantly raise the upper limit on reward payments for reports." He also explained, "More fundamentally, we will create a separate fund financed by illicit gains and other sources," and "We will dramatically increase reward payments in proportion to the amount of illicit gains."
This follows Presidential Chief of Staff Kang Hoonshik pointing out the previous day that "in our country, even if someone reports stock price manipulation worth hundreds of billions of won, the reward cap is only 3 billion won," highlighting the lack of effectiveness. In the case of the U.S. Securities and Exchange Commission (SEC), for cases where fines and penalties exceed 1 million dollars (about 1.33 billion won), internal whistleblowers can receive up to 30% of the recovered illicit gains as a reward. In particular, in the "Ericsson case" cited by Chief of Staff Kang as an example, the SEC paid approximately 279 million dollars (about 370 billion won) in rewards to a whistleblower. The view is that such measures are necessary to make a reality of the Lee Jaemyung administration's declared principle that "stock price manipulation equals total ruin."
Along with this, Chairman Lee emphasized that "the KOSPI 5000 breakthrough is a new starting line and, at the same time, the point at which even greater responsibility begins," and said he would accelerate fundamental structural improvements in the capital market. He said, "We will make it natural for corporate management culture to prioritize shareholder value," and "We will support corporate innovation so that companies people want to invest in continue to emerge on our stock market." He added, "We will improve market infrastructure in line with global standards and promote investment by domestic and foreign investors through tax support and other investment incentives."
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