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Photo courtesy of the Korea Exchange |
[Alpha Biz= Paul Lee] South Korea’s joint task force on combating stock price manipulation conducted a raid on the headquarters of the Korea Economic Daily on Wednesday, as authorities investigate allegations that several of its journalists were involved in front-running practices.
According to sources, the task force has identified circumstances suggesting that five reporters from the newspaper may have engaged in front-running—fraudulent trading in which individuals acquire favorable information ahead of publication, purchase related stocks in advance, and then sell them for profit after prices rise following the release of news articles.
Financial authorities said the raid began earlier in the day at the newspaper’s offices in central Seoul.
In a statement to MediaToday, a Korea Economic Daily official said the company would “fully cooperate with the authorities’ investigation and take all necessary measures.”
Since last year, financial regulators have been intensifying investigations into unfair trading practices involving reporters at some business newspapers, particularly those linked to so-called “featured stock” articles.
Such articles typically highlight individual stocks showing notable price movements during the trading day and analyze the underlying positive or negative factors driving those moves.
In November last year, the Capital Markets Special Judicial Police under the Financial Supervisory Service arrested and referred to prosecutors a former journalist identified as A and a full-time investor identified as B, accusing them of earning more than KRW 100 billion in illicit profits by exploiting featured stock articles.
The special judicial police are currently conducting additional investigations into alleged unfair trading involving both current and former journalists.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
