The Capital Markets Special Judicial Police of the Financial Supervisory Service (FSS) launched a search and seizure operation today (September 9) targeting an active FSS press corps reporter from an economic media outlet on suspicion of front-running.

According to the FSS, the special judicial police conducted a search and seizure this morning at the home and press room desk of reporter A.

Investigators are reportedly planning to also conduct a search and seizure at the reporter's media company.

It was also reported that the special judicial police tracked down reporter A to a vacation spot in a regional area to seize their mobile phone.

The special judicial police suspect that a group including the head of a listed small-to-mid entertainment agency and a quasi-investment advisory operator lured four active reporters, including reporter A, to have featured stock articles published and thereby gained unfair profits.

This is a front-running method where related stocks are purchased in advance before positive news articles are published, and then sold off after the stock prices rise to reap illegal gains.

The number of market manipulation stocks involved in their scheme is estimated at around 300, with illicit profits reaching the 3 billion won range.

However, it is known that no figures from the financial industry, such as securities firm employees or analysts, are among the leading ringleaders.

The FSS also plans to conduct search and seizure operations at the entertainment agency and other locations.

This case is the last of the four ongoing front-running cases involving featured stock articles tied to former and current reporters that the FSS special judicial police have been investigating since last year, which has not yet been handed over to prosecutors.

Last November, the FSS special judicial police referred a former reporter and a full-time investor with a background in the securities industry to prosecutors on charges of front-running exploiting featured stock articles.

In June of this year, they additionally investigated and forwarded two more cases to prosecutors, including a case involving a certified public accountant and former and current reporters, as well as a standalone case involving an active reporter.
 
(Photo: Yonhap News)