Super-rich, financial experts caught in massive stock manipulation

Lee Seung-woo, deputy vice governor of the Financial Supervisory Service and head of the joint task force against stock manipulation, speaks during a media briefing at the Korea Exchange building in Seoul, Tuesday. Yonhap

By Jun Ji-hye

• Published Sep 23, 2025 3:23 PM KST

Fines and executive restrictions planned under 'one strike, you're out' policy

Super-rich individuals, including hospital and private academy owners, have been caught colluding with financial professionals, such as a former senior executive at a major private equity fund, to carry out large-scale stock manipulation, financial authorities said Tuesday.

These individuals allegedly mobilized around 100 billion won ($72 million) for market-rigging schemes, earning illicit profits of about 40 billion won.

This marks the first case handled by the joint task force against stock manipulation, launched in July and comprising officials from the Financial Services Commission (FSC), the Financial Supervisory Service (FSS) and the Korea Exchange. The task force was established to detect and investigate illegal and unfair stock trading activities, a key policy emphasized by President Lee Jae Myung.

According to the task force, authorities raided some 10 sites, including the residences and offices of seven individuals who manipulated stock prices over an extended period using substantial funds.

The suspects include wealthy owners of general hospitals, oriental medicine clinics and private academies, as well as a bank branch manager, an asset management executive and a former senior private equity fund official. The task force suspects collusion among them, citing money flows, trading locations and personal ties such as family and school connections.

The group is accused of mobilizing more than 100 billion won in funds, sourced from corporate capital and bank loans, and using tactics such as inflated buying and wash trades to lure investors over the past 21 months. They allegedly placed more than 10,000 sham and collusive orders, executing them within short intervals to create the illusion of active trading.

Their illegal gains are estimated at 40 billion won, with realized trading profits totaling 23 billion won.

“The Korea Exchange and the FSS detected unusual trading patterns earlier this year through market surveillance, and the FSS launched a formal probe around March,” Lee Seung-woo, deputy vice governor of the FSS and task force head, said during a media briefing. “The number of suspects and the scope of the case could expand further.”

To evade monitoring, the suspects allegedly dispersed trades across dozens of accounts and disguised order IP addresses. They were also found to have exploited an ongoing management dispute.

Their main target was a KOSPI-listed stock with limited float and low trading volume, which ultimately surged to about twice its previous price.

“The significance of this case lies in halting a large-scale and highly sophisticated stock manipulation scheme mid-operation, orchestrated by an elite group of prominent business figures, medical professionals and financial experts,” Lee said. “Previously, it could take more than a year for an FSC investigation to lead to compulsory measures, but with the task force, that process has been cut to about six months.”

Based on the findings, the task force plans to impose fines of up to twice the illicit profits and apply measures such as bans on trading financial investment products and restrictions on executive appointments at listed companies, in line with the government's "one strike, you're out" policy.

It added that four other major unfair trading cases are also under ongoing investigation.

Separately, the Securities and Futures Commission (SFC) under the FSC said that it had fined an employee of a listed firm 48.6 million won — double the 24.3 million won illicit profit — for insider trading.

The employee was found to have used nonpublic information obtained through work about the company’s share buyback plan to purchase 120 million won worth of stock in a spouse’s account.

“The maximum penalty allowed by law was imposed in this case, as we believe a strong stance is needed against insider trading involving undisclosed information,” an SFC official said.