'Accountant and Reporter' Indicted and Detained for Making 9.3 Billion Won from 'Stock Tip' Articles

[Financial News] A sitting reporter and a certified public accountant have been sent to trial while in custody for allegedly making tens of billions of won by buying stocks before publishing "stock tip" articles and selling them after prices surged following the reports.
According to the legal community on the 24th, the Seoul Southern District Prosecutors' Office indicted the detained accountant, identified as A, and the sitting reporter, identified as B, on the 6th on charges including violations of the Act on the Capital Market and Financial Investment Business, such as fraudulent unfair trading.
Prosecutors also added charges under the Act on Regulation and Punishment of Criminal Proceeds Concealment after finding signs that B concealed illicit trading gains or hid criminal proceeds through money laundering and other methods.
Earlier, the Special Judicial Police Officer for Capital Markets at the Financial Supervisory Service said on the 18th of last month that it had uncovered two unfair trading cases involving stock tip articles and sent seven people, including two suspects who were detained, to prosecutors with a recommendation for indictment.
According to the special judicial police, accountant A, the alleged ringleader of the stock manipulation scheme, formed a manipulation ring with three reporters after recognizing the impact of stock tip articles, which can trigger massive buying by retail investors once published. From October 2020 to June last year, the group is accused of distributing about 1,800 articles and making roughly 8.56 billion won in illicit gains.
The special judicial police sent A to prosecutors in custody, while five others, including four current and former reporters and one accomplice, were referred without detention.
Separately from the organized scheme, B is accused of abusing article distribution privileges, which allow stories to be exposed on portal sites at a desired time. Using accounts in his own name and borrowed-name accounts, he allegedly bought shares in small- and mid-cap stocks before publication and earned about 750 million won in illicit gains through some 300 articles over about one year and 10 months.
Prosecutors are still investigating the remaining five current and former reporters who were referred without detention.

[email protected] Kim Hyun-chul Reporter