President vows to confiscate gains from stock price rigging

President Lee Jae-myung speaks during a meeting on eradicating unfair trading at the Korea Exchange's headquarters in Seoul, Wednesday. Joint Press Corps

President Lee Jae-myung expressed his intention to introduce a tough new policy targeting unfair stock trading, the presidential spokesperson said Wednesday.

According to presidential spokesperson Kang Yu-jung, Lee ordered that heavy penalties be imposed on individuals involved in illicit trading practices in a "one strike, you're out" policy. The directive came during a field meeting held at the Korea Exchange’s (KRX) focus on eradicating unfair trading.

"The new administration is preparing strong sanctions that will immediately expel individuals involved in unfair trading practices, such as stock manipulation, and fully reclaim their unjust gains through penalties," Kang said. "This marks a shift from lenient measures like warnings or administrative fines to a strict one-strike-out approach."

During the meeting at the KRX, Lee pledged to actively pursue a range of reforms to revitalize the capital market, interpreting the 5.8 percent surge in the benchmark KOSPI index since his inauguration on June 4 as a sign of public trust in the new administration.

Electronic signboards at Hana Bank in Seoul show that the benchmark KOSPI closed at 2,907.04 on Wednesday, breaking the 2,900 mark for the first time in three years and five months. Yonhap

"To revitalize the capital market, it is crucial to establish a fair and transparent market order and restore investor trust," Lee said. "We will upgrade the system to promptly detect unfair trading in response to new tactics, and actively consider expanding the organization and workforce to ensure swift investigations."

Lee also hinted at the possibility of lowering taxes for companies that maintain responsible dividend policies.

"Is it necessarily the right approach to reduce dividend income tax across the board? I’m not so sure," Lee said, but noted, "As proposed by Rep. Lee So-young (from Democratic Party of Korea), a system that grants tax cuts only to companies with a high dividend payout ratio (35 percent) is worth considering."

He encouraged attendees to share ideas freely and urged them to work together to push the KOSPI toward the 5,000 mark. The index closed at 2,907.04, Wednesday, breaking the 2,900 mark for the first time in three years and five months.