Financial Elites from Seoul National University Pocket 20 Billion Won Through Insider Trading Cartel

Financial elites who graduated from a Seoul National University business club have been caught operating an information cartel, sharing undisclosed mergers and acquisitions (M&A) information for several years and making over 20 billion won in illicit profits.

The Joint Response Team for Eradicating Stock Manipulation—comprising the Financial Services Commission, the Financial Supervisory Service, and the Korea Exchange—announced today (September 29) that it has raided some 20 locations, including homes and offices, after catching individuals involved in the use of undisclosed information, including private equity fund operators and listed company officials who amassed illegal profits through this scheme.

Investigations showed that the key suspects in the case built connections while participating together in a Seoul National University business club and a global consulting firm.

They subsequently moved to private equity fund operators and listed companies, where they handled tasks related to M&As, including public tender offers.

It was revealed that they repeatedly shared positive, undisclosed information regarding numerous stocks acquired in the course of their work over the past five years or so.

They also passed on the information to family members and acquaintances to use in stock trading. Authorities believe they pocketed more than 20 billion won in illicit gains by purchasing the stocks in question before the information was made public and then disposing of them at high prices after the stock prices rose following the public disclosure.

Authorities view the matter as severe given that the sharing of undisclosed information within the information cartel was repeated over a long period and that the source of the information consisted of M&A professionals bound by strict confidentiality obligations.

To prevent the suspects from concealing their ill-gotten gains, the Securities and Futures Commission has placed a freeze on the securities accounts holding the funds in accordance with the Capital Markets Act.

This case came to light during the process in which the Financial Supervisory Service and the exchange conducted an in-depth analysis by combining cases where the same suspects were repeatedly implicated, out of undisclosed information cases detected through market surveillance over the past several years.

The joint response team has been conducting investigations through cooperation among related agencies since last May.

(Reported by Kim Minjeong | Video by IYOO | Graphics by Lee Jung-joo | Produced by SBS Digital News)
※ Please note: This article was translated by AI and may contain errors.