Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
Kosdaq vulnerable to fake news
gettyimagesbank
By Park Jae-hyuk
Regulators passive about crackdown on market manipulators
By Park Jae-hyuk
Easier methods of spreading fake news are enabling more frequent price manipulations of stocks listed on the tech-heavy Kosdaq market, which have relatively lower market capitalization and trading volume compared to the benchmark KOSPI market.
Earlier this week, a fake press release of a Kosdaq-listed semiconductor and display chemical company, Ram Technology, was sent to journalists via email, leading some news outlets to report bogus news about the company's new patent on ultrapure hydrogen fluoride manufacturing technology.
As a result, Ram Technology's stock price hit the daily price ceiling of 8,890 won, Monday.
Its stock price hit the daily price ceiling of 11,550 won again on Tuesday morning, but the company issued a press release informing journalists and investors that it did not send Monday's controversial press release and its stock price dropped sharply to close at 7,410 won during Tuesday's session.
The company pointed out some errors mentioned in the fake press release.
“Although we obtained a domestic patent, Oct. 1, on the method of refining ultrapure hydrogen fluoride, we did not send any relevant press release Nov. 22,” Ram Technology said in a regulatory filing after trading ended on Tuesday.
Last month, an image similar to a screenshot from a news outlet's website suddenly raised the stock price of semiconductor materials manufacturer, Dongjin Semichem, to its daily price ceiling.
This came as the image, which read that Samsung Electronics Vice Chairman Lee Jae-yong ordered executives to acquire Dongjin Semichem to nurture the photoresist business, was shared on Telegram and other mobile messengers.
Immediately after investors realized that it was groundless, Dongjin Semichem's stock price plunged.
The problematic image was made using a program which helps users create an image similar to a screenshot from a news outlet's website by typing in a headline.
The program was also used in July to spread fake news that HLB Group Chairman Jin Yang-gon was arrested for fraud.
After the fake news on the chairman was shared on mobile messengers, Kosdaq-listed drug makers ― HLB and HLB Pharmaceutical ― suffered sharp declines in their stock prices.
The fake news even dragged down the stock price of KOSPI-listed Next Science by 25.74 percent, because Jin is the largest shareholder of the company.
The series of fake news releases have caused severe damage to individual investors, but financial regulators have maintained a passive attitude about cracking down on those who spread such fake information.
Following the Ram Technology fiasco, the Korea Exchange (KRX) said it would check whether anyone reaped profits from the publication of the fake press release, but the bourse operator declined to ensure an investigation into the person who issued the fake press release would occur.
“If we detect any suspicious trading, our investigation team will check relevant accounts,” a KRX official said. “If there is any probability of unfair trading, we inform the Financial Supervisory Service (FSS).”
The FSS has also declined to confirm whether or not it will inspect Ram Technology.
“The financial authorities need to tighten regulations to punish those who spread fake news,” a securities industry insider said on condition of anonymity.