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Prosecutors have launched an investigation into allegations that former Daou Kiwoom Group Chairman Kim Ik-rae was involved in a stock manipulation scheme that caused the share prices of eight companies plummeting for no apparent reason in May.
The bank accounts of those suspected of manipulating stock prices will be frozen and their illegally earned profits will also be confiscated. These are part of plans announced by financial regulators in what they are calling their “war against those who disturb the market.” The Financial Services Commission (FSC), the Financial Supervisory Service (FSS), Korea Exchange (KRX) and Seoul Southern District Prosecutors' Office discussed such measures, Tuesday.
Deteriorating public sentiment toward Kiwoom Securities is showing no signs of letting up, even after its former Chairman Kim Ik-rae resigned for his alleged involvement in a nationwide stock manipulation scandal. Kim made the abrupt announcement Thursday afternoon and decided to donate all of his gains worth 60.5 billion won following his suspicious sell-off of 1.4 million Daou Data shares. Daou Data is an affiliate of Daou Kiwoom Group. The firm's stock price fell sharply shortly after Kim sold his shares.
Korea's top financial watchdog has launched an investigation into Kiwoom Securities to look into whether the company engaged in unfair sales of a contract for difference (CFD). The risky leveraged derivative is considered to have driven the latest stock manipulation scandal which incurred combined losses of around 8 trillion won within only four days late last month.
Two figures involved in the latest stock manipulation scandal are escalating ensuing legal battles and claiming innocence regarding the abrupt collapse of eight listed shares here.