South Korea's Financial Services Commission held a meeting on the 8th to review the first-year performance of its Joint Response Team against stock price manipulation. The task force, which launched last July with 36 members and has grown to 90, detected over 10 major unfair trading cases. The FSC announced plans to grant investigators authority to request communication records, expand principal confiscation to all three major types of unfair trading, and propose a Capital Markets Act amendment in the third quarter this year.
Joint Response Team Detects Over 10 Major Unfair Trading Cases in First Year
The Joint Response Team, established last July under the Financial Services Commission, Financial Supervisory Service, and Korea Exchange, has expanded from 36 to 90 members and will soon reach 100. Over the past year, the team detected over 10 major unfair trading cases including long-term market manipulation by high-net-worth individuals, insider trading by securities firm executives, and front-running by journalists. The team established a cooperation framework that assigns roles immediately upon detecting violations and conducts forced investigations such as search and seizure for large-scale cases with high risk of evidence destruction. The team also actively utilized the penalty surcharge system introduced this January to swiftly recover illicit gains instead of relying on lengthy criminal procedures.
FSC Plans Communication Records Authority and Principal Confiscation Expansion
The government plans to strengthen investigative and penalty powers to combat increasingly sophisticated stock manipulation crimes. The FSC plans to grant investigators authority to request communication records to prevent evidence destruction and trace information transmission routes. The current principal confiscation and collection provisions, which apply only to market manipulation crimes, will be expanded to cover all three major types of unfair trading including use of undisclosed material information and fraudulent unfair trading. The FSC plans to propose a Capital Markets Act amendment reflecting these changes in the third quarter this year. The government is also reviewing a plan to extend the payment suspension period for accounts involved in unfair trading to a maximum of 1 year, up from the current 6 months with a maximum of two extensions. The FSC plans to enhance its AI-powered market surveillance system by introducing a 'case analysis AI agent' that detects criminal activities on YouTube and social media and combines them with trading pattern analysis.
FSC Chairman Lee Emphasizes Zero-Tolerance Principle Against Market Manipulation
FSC Chairman Lee Eok-won stated, "If the playing field is tilted, no one can invest with confidence. We will respond strongly to organized stock manipulation crimes with the principles of swift detection, strict investigation, and zero-tolerance sanctions to firmly establish in the market that stock manipulation leads to ruin." Experts attending the meeting agreed with the direction of strengthening authorities' powers. Professor Kim Yu-seong of Yonsei University stated, "The Joint Response Team has greatly contributed to detecting unfair trading by reducing inefficiencies caused by previously dispersed authorities. However, for effective operation, urgent legal and institutional improvements such as establishing authority to request communication data are needed."
FAQ
What did South Korea's Financial Services Commission announce on the 8th?
The FSC held a meeting to review the first-year performance of its Joint Response Team against stock price manipulation and announced plans to grant investigators authority to request communication records, expand principal confiscation to all three major types of unfair trading, and propose a Capital Markets Act amendment in the third quarter this year.
How many unfair trading cases did the Joint Response Team detect in its first year?
The Joint Response Team detected over 10 major unfair trading cases over the past year, including long-term market manipulation by high-net-worth individuals, insider trading by securities firm executives, and front-running by journalists.
