Financial authorities to strengthen measures against unfair stock trading

Financial authorities announced Thursday a set of enhanced measures to crack down on unfair stock trading following a series of stock manipulation scandals.

The measures by the Financial Services Commission (FSC), the Financial Supervisory Service (FSS) and other related agencies came amid an ongoing investigation into a stock manipulation case where a group of members of an online trading community allegedly raised 700 billion won (US$523.4 million) by manipulating stock prices of eight companies listed on the main KOSPI and tech-heavy KOSDAQ indexes from May 2019 to April of this year.

Under the new measures, authorities will create a system where the FSC, the FSS, the Korea Exchange and the prosecution cooperate on a regular basis to monitor the market, share information, and manage unfair trading cases more efficiently.

The authorities will also strengthen the detection of abnormal trading patterns, including a long-term upward trend of stock prices, and improve the warning systems for such patterns in stock markets.

Punitive measures for unfair trading will also be strengthened.

The financial authorities plan to push for freezing the accounts suspected of unfair stock trading.

In May, a bill aimed at prohibiting individuals who have committed unfair trading from making transactions in the capital market for a maximum of 10 years and getting jobs at listed companies and financial firms.

In January next year, a law is also set to take effect to impose a fine of up to twice the value of profits generated by unfair trading.

The number of people investing in South Korean stock markets more than doubled from 6.14 million in 2019 to 14.4 million in 2022, and the trading value increased from 2.29 quadrillion won to 3.91 quadrillion won over the same period.

Source: Yonhap News Agency

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