Agency Reports Sharp Increase In Cases of Stock Price Tampering

The Financial Supervisory Service reported Thursday a rise in the number of cases of stock price manipulation. The service said it currently is involved in 280 incidents compared with a total of 463 cases for all of last year. Forty cases have been referred to the prosecutors office.

"The Korea Stock Exchange and the Korea Securities Dealers Association use a newly installed inspection system to monitor transactions that might be linked to stock price manipulation," said a service official.

In another case reported by the government agency, a security company official borrowed 2.2 billion won ($1.7 million) in the curb market and 800 million won from a listed company in 1999. He placed orders for a listed company's shares more than 1,500 times at a price higher than that quoted to raise the price of certain issues. The service investigation showed that the security company official, the listed company in question and the private loaner had conspired to manipulate the stock price.

In another case, the prosecutor's office indicted an investment trust company official and a security company manager on charges of manipulating stock prices after they placed 2,982 orders, making 2.1 billion won on the transactions.

The authorities said they are handing out heavier sentences for violations. Under the law, a person must pay three times the amount earned through an illegal stock transaction if the amount is more than 20 million won.

by Chung Sun-gu