There are these stock analysts who appear on cable channel programs and give away tips on which shares are hot.
It appears that they were making a fortune in the process.
According to the Seoul central prosecutor’s office, a 34-year-old owner of an investment consulting company made billions of won (millions of dollars) by buying stock in certain companies and then proceeding to promote them in a cable channel program.
The stock analyst was placed under arrest for scalping, the first of such cases in the finance industry.
Prosecutors said the analyst bought 76,000 share of Ahnlab, a computer software company run by former presidential candidate Ahn Chul-soo, in October 2011 then promoted it as a prime theme stock. Share prices skyrocked and he made off with 2.3 billion won ($2 million) in just 12 days.
The analyst rose to fame after winning an investment contest in 2009 and he allegedly took advantage of his popularity to promote specific stocks to make as much as 3.7 billion won ($3.3 million) since October 2011.
“While there are no legal limitations to scalping, what the analyst did amounts to fraud and illegitimate trading in stock,” one prosecutor said.