FSS to crack down on malicious market rumors

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By Anna J. Park

The Financial Supervisory Service (FSS) plans to tighten up inspections and punishments related to the spreading of groundless or malicious market rumors. The watchdog agency will jointly cooperate with the Korea Exchange (KRX) in the crackdown. The move comes as an attempt to stabilize local financial markets, as numerous rumors have been spreading fast online, amid growing concerns over increased market volatility.

“The FSS is strengthening its crackdowns on the dissemination of false information. It also plans to intensify inspections of unfair market transactions, while it will sternly punish those who intentionally spread malicious rumors to make personal profit by building up crisis sentiment,” an FSS official said.

The financial authority is also strengthening the investigation and punishment of those who attempt stock price manipulation. For instance, those who recommend buying certain stock items on particular dates, pretending to be an expert in the financial industry, while personally profiting by selling those previously purchased stocks at higher prices, could be subject to FSS investigations.

The FSS urged retail investors who witness such stock manipulation schemes to report them immediately to the KRX. The watchdog agency also advised them to refrain from investing money based on groundless rumors.

Earlier this week, the FSS said it is currently investigating various stock manipulation transactions worth 20 billion won ($14 million). The cases will be sent to investigative agencies.