Joint Task Force on Stock Manipulation Raids KOSDAQ Biotech Firm Over Alleged Insider Trading

The Joint Task Force for Eradicating Stock Manipulation is reportedly conducting raids today (the 15th) on a KOSDAQ-listed biotech company, Company A, and its employees on charges of making illicit gains by utilizing undisclosed information prior to the public disclosure of a contract with a global pharmaceutical company.

According to the financial sector, the joint task force has been conducting searches and seizures since this morning at Company A's headquarters located in Gangnam-gu, Seoul, as well as the residences of the employees implicated in the charges.

Company A is a KOSDAQ-listed company that develops immuno-oncology drugs and treatments for degenerative brain diseases.

Company A previously disclosed in the first and second halves of last year that it had signed technology transfer agreements related to the development of new treatments with global pharmaceutical companies.

At the time, the disclosures were perceived favorably by the market, causing Company A's stock price to surge to the daily limit or hit record highs following each announcement.

It is reported that about 10 employees of Company A and others are suspected of making illicit gains by acquiring shares before the news of the contract signings was publicly disclosed and then selling them after the stock prices rose following the disclosures.

The current Capital Markets Act prohibits insiders from using undisclosed material information related to the business of a listed company for the trading of stocks and other securities, or letting others use it, known as the prohibition of utilizing undisclosed material information.

The scale of the illicit gains identified so far is estimated to be around hundreds of millions of won.

(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.