Lee Yeon-woo is a financial journalist at The Korea Times. Her wide range of reporting includes policies, macroeconomics, stock market, companies and even crypto. She is passionate about connecting the dots in Korean finance and making it easier for foreign nationals to understand. Based on her previous experience as a national reporter, she also has a keen interest in social issues within the sector, including gender equality and ESG. Your tips and insights are always appreciated. You can send them to yanu@koreatimes.co.kr.
Promise of KOSPI 5,000 undermined by DPK lawmaker's suspected stock trading
Rep. Lee Choon-suak from the ruling Democratic Party of Korea leaves after voting at the National Assembly in Seoul, Tuesday. Yonhap
By Lee Yeon-woo
The ruling Democratic Party of Korea (DPK) is struggling to advance its vision for "KOSPI 5,000," amid a series of political setbacks, industry officials said Thursday.
One of its lawmakers has been implicated in a stock trading scandal involving the alleged use of insider information, while the party’s tax reform policy is drawing criticism for being unfriendly to the market.
Allegations that Rep. Lee Choon-suak engaged in proxy stock trading emerged after a domestic media outlet published photos on Tuesday that were taken during a National Assembly plenary session on Monday.
In the images, Lee appeared to be trading stocks via a mobile app, using an account registered under the name of his aide, identified as Cha.
The trades included 537 shares of KakaoPay, 150 shares of Naver and 420 shares of LG CNS — companies widely considered beneficiaries of policy initiatives under the Lee Jae Myung administration. Based on Tuesday's closing prices, the stocks were valued at approximately 97 million won ($70,137).
"Rep. Lee chairs the second economic division of the presidential state affairs committee, overseeing key sectors such as AI (artificial intelligence) and industrial policy. The proxy trading of AI-related stocks raises serious suspicions of insider trading and potential violations of capital market laws," said Rep. Joo Jin-woo of the main opposition People Power Party.
Rep. Lee initially denied any wrongdoing. However, as criticism mounted both within and outside the party, he announced his resignation abruptly on Tuesday night. The DPK subsequently expelled him from the party.
Industry observers believe his departure was driven by concerns over rising public anger toward the ruling party.
President Lee has positioned the KOSPI 5,000 goal as a signature economic initiative and has publicly emphasized the importance of fair practices in the stock market.
The timing could not have been worse. The administration was already under fire for tightening tax regulations in the capital market.
While leaving real estate taxes largely unchanged, the recent policy package included a reduction in the capital gains tax liability threshold for large shareholders — from 5 billion won in stock holdings to 1 billion won — and an increase in the securities transaction tax from 0.15 percent to 0.2 percent.
These measures caused the benchmark KOSPI, which had previously surged on policy-driven optimism, to falter. Several global investment banks subsequently reduced their exposure to the Korean market. In response, the DPK said it would revisit its approach to restore investor confidence.
"While some profit easily through insider information, retail investors are left struggling, losing sleep and sanity," one online comment read.
"How can they talk about KOSPI 5,000 under these circumstances?" another said.
Commenting on the controversy, the president said he takes "the matter seriously" and instructed authorities to "swiftly uncover the facts and conduct a thorough and impartial investigation."
The Seoul Metropolitan Police also confirmed Thursday that a 25-member task force has been assembled to lead the investigation.