Prosecutors and financial authorities launch investigation into SG Securities stock price crash

The stock market plunged by foreign securities firm Societe General (SG) Securities is rocking the stock market every day, and prosecutors and financial authorities have launched an investigation. This is because suspicions have been raised that there is a stock price manipulation force behind this event. Currently, the prosecution has banned 10 people suspected of stock handling forces from leaving the country.

Financial Securities Crime Joint Investigation Team of the Seoul Southern District Prosecutor’s Office (Chief Dan Seong-han)on the 24th banned 10 suspected stock manipulators from leaving the country. On the 27th, the capital market investigation team of the Financial Services Commission, the special judicial police, with the cooperation of the prosecution, raided the office of an investment consulting company in Gangnam-gu, Seoul, related to the incident.

Financial Services Commission Chairman Kim Joo-hyun said on the 27th, “The search and seizure was carried out by 34 people jointly with the Financial Services Commission, the Exchange, the Financial Supervisory Service, and the District Prosecutor’s Office the South.” The Seoul Gangnam Police Station also confiscated 200 mobile phones from their offices on the 26th and began analysis. Police are known to investigate unregistered advisory payments rather than stock price manipulation payments.

A total of 8 stocks fell in this event: Sunkwang, Harim Holdings, Sebang, Samchully, Daesung Holdings, Seoul Gas, Daol Investment & Securities, and Daou Data. At the same time as the stock market opened on the 24th, all eight of these stocks are reaching the lower limit. Their market capitalization evaporated almost 8 trillion won in 4 trading days from the 24th. Some stocks have plunged up to 75%. Singer Lim Chang-jung is known to have participated as an investor and suffered billions in losses. At the moment, some other famous names are being mentioned.

In the case of Daou Data, suspicions were raised that Daoukium Group’s chairman, Kim Ik-rae, was aware of the fact that the executive forces or the fact that the stock price was being manipulated in advance regarding the disposal of Dow Data’s stock two days before the accident , and the financial authorities looked into it

Some argue that the cause of this fall was ‘trade trading’ by stock manipulation forces. Stock manipulators are said to raise the stock price and then sell it through regular trading by opening mobile phones in the names of investors and making proxy investments. Some say contracts for difference (CFDs) have exacerbated the problem. A CFD is a transaction where an investor invests using leverage with only a share of profit, and can sell stocks without actually owning them, so it can produce the same effect as short selling. If the margin is less than the promised amount, the securities company conducts reverse trading without the investor’s consent.

Meanwhile, the South Seoul District Prosecutors’ Office announced on the 28th that it would form a joint investigation team consisting of the Financial Services Commission’s Capital Market Investigation Division and the investigation and investigation personnel of the Financial Supervisory Service.


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