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Lee Seung-gi's father-in-law indicted in 'unprecedented case of stock price manipulation'

Published: 15 May. 2025, 21:56

An illustration of stock fraud and manipulation [JOONGANG ILBO]

Singer Lee Seung-gi’s father-in-law and 12 others have been indicted on charges of manipulating the share prices of three Kosdaq-listed companies and earning illicit gains estimated at around 20 billion won ($14 million), prosecutors announced Thursday.

The Financial and Securities Crime Joint Investigation Unit of the Seoul Southern District Prosecutors’ Office said it had charged 13 individuals, including eight who have been placed under detention, with violating the Financial Investment Services and Capital Markets Act.

According to the prosecution, the group spread false information claiming that the companies were launching new high-tech ventures in order to artificially inflate their share prices. The first target was JoongAng Advanced Material, a secondary battery materials company. From November 2022 over the course of about a year, the group allegedly manipulated its share price from 490 won to 5,850 won per share — more than a tenfold increase — generating some 14 billion won in profit.

It later used a fake investment commitment letter claiming a 100 billion won deal to inflate shares of renewable energy firm Quantapia, extracting an additional 6 billion won.

Lee’s father-in-law also allegedly paid a 30 million won retainer to a former prosecution investigator and promised an additional 1 billion won success-based fee in February 2023 after Quantapia’s shares were suspended. Prosecutors have charged them under the Attorney-at-Law Act for illegal solicitation.

Lee's father-in-law — also surnamed Lee — and the prosecutor reportedly tried to recoup losses by inflating the stock price of Xcure, a SIM card manufacturer, by spreading rumors that it would enter the AI and robotics businesses and placing manipulative orders.

The Seoul Southern District Prosecutors' Office in southern Seoul [NEWS1]

Lee also made around 100 million won by purchasing shares under borrowed names using nonpublic information obtained during an acquisition, prosecutors added.

“This is an unprecedented case of a stock price manipulation ring repeatedly committing similar offenses,” a prosecution official said. “It encompasses all major violations of the capital markets law — price manipulation, fraudulent trading, and insider trading — and poses a serious threat to market order.”

Authorities have frozen assets worth 3 billion won held by the suspects, including luxury cars and real estate, and are prioritizing the recovery of criminal proceeds.

In a statement issued April 29, Lee Seung-gi said, “Though my father-in-law was previously fined in a retrial over earlier allegations, it is devastating that he now faces indictment for similar offenses.” He added, “This incident has irreparably damaged the trust within our family. After much deliberation, my wife and I have decided to cut ties with her family.”

The singer had previously defended his in-laws against media reports of stock manipulation, calling them unfounded.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY LEE HAY-JUNE [[email protected]]