Seoul: A joint task force of financial authorities and the stock market operator set sail Wednesday in a follow-up step to quickly detect and root out stock manipulation. The joint response team, comprising officials from the Financial Services Commission (FSC), the Financial Supervisory Service (FSS), and the Korea Exchange, is tasked with detecting and probing illegal and unfair stock trading activities.
According to Yonhap News Agency, FSC Vice Chairman Kwon Dae-young emphasized the urgency of eradicating stock price manipulation by the year 2025. He warned individuals involved in such activities about severe consequences, stating that penalties would surpass any illegal profits gained. The aim is to expel stock price manipulators from the capital market effectively.
The previous approach to combating unfair trading was fragmented across various institutions, leading to delays in enforcement. President Lee Jae Myung has advocated for stringent measures against stock manipulation to strengthen the local financial market. Starting in October, those caught illegally trading stocks will face fines up to twice their unjust gains, with the market monitoring system shifting focus from trading accounts to individuals.
The current account-based monitoring system has been ineffective in detecting connections between accounts owned by the same person. Under a new "one-strike out system," stock manipulators will face a five-year ban from the capital market, limiting their ability to trade financial investment products and barring them from executive roles at listed companies.
Additionally, major shareholders and executives found guilty of illegal or unfair trading will be publicly identified following a resolution by the Securities and Futures Commission under the financial regulator.