25 Members Involved in 'SG Securities Stock Manipulation' Avoid Prison Sentences in First Trial

[Financial News] All members involved in the Societe Generale Securities Korea stock manipulation case have avoided prison sentences.
According to legal sources on the 31st, the 11th Criminal Division of the Seoul Southern District Court, presided over by Chief Judge Jang Chan, sentenced 24 members of Ra Deok-yeon's organization, including trading team employee A, to suspended prison terms ranging from 18 months to 2 years, with probation periods of 2 to 3 years, for violations of the Financial Investment Services and Capital Markets Act (FSCMA) and other charges. For 21 of them, the court also suspended fines of 20 to 30 million won along with the suspended prison sentences. A suspension of sentence means that if the defendant does not reoffend within a certain period, the punishment is effectively waived after two years.
Defendant B, who is preparing for the civil service exam, was fined 20 million won, as a sentence of imprisonment or higher could hinder their appointment.
The court stated, "This case is regarded as the largest stock manipulation incident in the domestic securities market and has shocked the market, undermining trust in Korea’s capital market." However, it added, "The defendants were lower-level members of Ra Deok-yeon's organization, mobilized to trade stocks under the direction of superiors, and it does not appear they fully understood the entire scope of the crime."
The court further noted, "Many of the defendants themselves incurred significant debt by making leveraged investments in Ra Deok-yeon's organization. Granting them another opportunity to reintegrate into society is considered desirable both nationally and socially, so leniency was exercised."
From May 2019 to April 2023, the group was prosecuted for manipulating the prices of eight listed companies using funds solicited from investors by promising high returns, thereby earning illicit profits totaling approximately 730.5 billion won. They were also charged with attracting discretionary investment clients and managing investor-named Contract for Difference (CFD) accounts without registering as a financial investment business, resulting in an additional 194.4 billion won in gains.
The investigation found that, under the leadership of Ra Deok-yeon, about 50 organization members were divided into teams such as sales management, trading, settlement, and corporate management, and systematically recruited more than 900 investors over three years.
Previously, in February, the court sentenced Ra to 25 years in prison, a fine of 146.51 billion won, and forfeiture of 194.49 billion won, ordering his immediate detention. Both Ra and the prosecution appealed the first trial, and the case is now under review at the Seoul High Court.
welcome@fnnews.com Jang Yu-ha Reporter