Speculators scrutinized in bull run

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Speculators scrutinized in bull run

The recent bull run in the Korean stock market has attracted an increasing number of speculators who may have fanned unfair stock trades or manipulated prices, according to the Financial Supervisory Service yesterday.
The number of unfair stock trades reported during the January-September period in 2007 year totaled 186 cases, up 53 percent from 122 a year earlier.
The Financial Supervisory Service investigated 159 cases in the first nine months of 2007, up 12.7 percent from the same period last year.
There were 88 cases involving stock price manipulation or use of undisclosed information.
Of 159 cases researched by the government-run financial watchdog, 61 percent, or 97 cases, were handed over to the prosecution for further investigation. Nine cases involved accusations of spreading false information on firms in the midst of mergers and acquisitions.
Six cases were related to stock price manipulation by circulating information that a listed firm was preparing to launch a natural resource-related business. Those speculators took advantage of investor sentiment that tends to be tempted by energy shares amid soaring oil prices.
“We will step up our surveillance of the stock market by keeping an eye on public announcements as well as checking rumors, as stock-related crimes continue to evolve and take more intelligent, systematic forms,” said a spokesman for the Financial Supervisory Service. “A special investigation team will be dispatched for urgent cases under cooperation with the Korea Exchange.”
The number of unfair trades linked to the junior Kosdaq-listed firms totaled 142, accounting for 76.3 percent of incidents discovered by the watchdog. Cases involving charges of embezzlement and company fund misappropriation by top managers or majority shareholders of the Kosdaq totaled 39 from the beginning of this year till Oct. 26, up from 18 cases in 2006.

By Seo Ji-eun Staff Writer [spring@joongang.co.kr]
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