Insider trades alleged in big Samsung sale

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Insider trades alleged in big Samsung sale

Four former and incumbent employees of Hanwha Techwin, previously known as Samsung Techwin, were reported to the prosecutors’ office for insider trading during the sale of Samsung Techwin to Hanwha Group in November 2014, one of the biggest deals in Korean business history.

The Financial Services Commission (FSC) on Wednesday held a committee meeting where they have decided to report the four former and incumbent employees of the defense contractor, who made stock transactions using undisclosed information about the sale.

According to the FSC, two high-ranking officials at Samsung Techwin obtained information from an emergency meeting led by the company’s CEO that the company was being sold to Hanwha Group. Using an account under other people’s names, they sold Samsung Techwin shares and bought Hanwha Group shares. They then called two other executive-level officials to do the same.

The four sold 2.37 billion won ($19.1 million) in stocks, preventing losses of 935 million won as a result.

When the deal was announced on Nov. 26, Samsung Techwin’s stock plunged to its daily limit.

“We have secured related evidence by restoring data including phone records and e-mail exchanges,” said an FSC official, adding that it was the first time insider trading had been proved using so-called digital forensics in Korea.

“We will focus our investigations on insider trading to establish order in the market,” the official added.

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