Kiwoom Securities raided over alleged stock manipulation

Kiwoom Securities headquarters in Yeouido, western Seoul [NEWS1]

Prosecutors raided Kiwoon Securities and KB Securities to probe into a recent alleged stock manipulation.

A joint investigation team of prosecution and financial authorities from the Seoul Southern District Prosecutors' Office raided headquarters of Kiwoom Securities and KB Securiteis in Yeouido, western Seoul, on Wednesday morning to secure materials related to contract for difference (CFD) trades of the stocks that crashed last month, the district prosecution office said.

CFD is a derivative used by alleged stock manipulators led by Ra Deok-yeon, a key suspect who ran a quasi-investment advisory firm to pump up prices of at least eight stocks for as long as three years. These stocks had hit the daily lower circuit of 30 percent for up to four days when the stock market opened on April 24

Kiwoom Group Chairman Kim Ik-rae, whom Ra blamed for short-selling 1.4 million Daou Data shares just before the stock price plunged 30 percent for three days straight, was reportedly not subject to the raid.

Prosecutors plan to charge Ra and two other alleged manipulators within this week and continue their probe into other high-value investors who may have funded Ra's team by "investing" with them.

BY SOHN DONG-JOO [sohn.dongjoo@joongang.co.kr]