[Two Securities Firm Employees Caught for Stock Price Manipulation Using Fictitious Accounts
The Securities and Futures Commission has reported two executives and employees of a securities firm to prosecutors for attempting to manipulate stock prices to gain unfair profits.
The accused allegedly colluded with so-called "operational" forces, using illegal accounts under false names to manipulate stock prices through methods such as closing price intervention and high-price purchase orders.
In fact, the company they targeted, Boseong Telecom, has a capital of less than 10 billion won, and its primary product—accounting for most of its sales—is merely the assembly of Japanese products. Despite this, its growth potential and value were excessively inflated, leading to an abnormal surge in stock prices over the past few months.
Finding this suspicious, the Securities and Futures Commission closely monitored the stock's movements and detected signs of price manipulation. As a result, it recently conducted a surprise search and seizure at Donghae Peregrine Securities.
Donghae Peregrine Securities distanced itself from the incident, calling it an individual misconduct case involving only a few employees, and pledged to implement measures to prevent such occurrences in the future…]
"So this is how it ends."
Just a few days after talking with Manager Choi Bok-rak, the Boseong Telecom stock manipulation case was wrapped up, placing the blame on the arrested individuals—Manager Son Oh-seung and Assistant Manager Jo Cheol-rae—rather than on Woo Ho-geun's group.
In the meantime, Boseong Telecom's stock, which had once climbed close to 30,000 won, plummeted continuously and eventually dropped below 5,000 won.
It had fallen even lower than its price before the manipulation attempt.
"Since it was revealed that all the so-called 'positive news' was nothing but lies and even the major shareholders were being investigated by prosecutors for stock manipulation, this was bound to happen."
Moreover, all the Boseong Telecom shares that Woo Ho-geun's group had acquired for the stock manipulation scheme were seized, meaning they lost every last cent they had invested.
Setting the newspaper down, Seok-won leaned back in his chair and smirked as he thought of Woo Ho-geun.
"He must be feeling absolutely miserable right now."
Just then, a knock sounded, and his secretary, Na Seong-mi, entered.
"Director, it's time for your meeting."
"Is it already that time?"
Rolling up his sleeve to check his wristwatch, Seok-won stood up.
As he retrieved his jacket from the coat rack and slipped it on, he suddenly remembered something.
"Oh, by the way, I have a business trip to the U.S. next week, so adjust my schedule accordingly."
"How long will you be staying this time?"
"I'm planning for about two weeks, but it could be extended depending on the situation."
"Understood. I'll adjust your schedule accordingly to match your return date."
Seok-won nodded slightly in response.
When Seok-won entered the conference room, the team leaders, including Choi Ho-geun, who had arrived earlier, all stood up.
Acknowledging them with a slight nod, he naturally walked to the seat at the head of the table and sat down.
The team leaders followed suit and took their seats again.
After scanning the room once, Seok-won turned his gaze to the right, where Team 1 Leader Kim Jeong-sik sat, and spoke.
"Let's start with Team 1."
"Yes, sir."
Responding concisely, Kim Jeong-sik glanced at the documents in front of him and began his report.
"With the yen at an all-time high, we expect significant performance improvements for export-driven companies. We plan to increase our investment allocations in electronic firms such as Saseong, TG, Hyunwoo, and Daegwang."
"Since a stronger yen makes Japanese companies less competitive, Korean electronics firms will benefit from lower export prices. That's a solid strategy."
"An increase in home appliance exports is expected, but with the semiconductor division's performance projected to improve significantly this year, there's considerable potential for stock price growth."
Seok-won suddenly spoke, as if recalling something.
"Now that I think about it, Saseong Electronics announced today that they have developed the world's first prototype of a 16-megabit DRAM using silicon dual-layer wafer technology."
"Yes. Not just the industry leader Saseong Electronics, but also TG, Hyunwoo, and Daegwang have managed to develop 4-megabit DRAMs, albeit slightly behind, and they are planning to begin mass production in the second half of the year."
"Considering that the personal computer market is expanding and the use of semiconductors in household appliances is increasing, investing in semiconductor manufacturers is a good idea."
"Thank you."
Kim Jeong-sik, the Team 1 leader, looked pleased with the praise.
Especially since he had a subtle rivalry with Team 4, he even glanced at Team Leader Choi Ho-geun with a look that said, What do you think of that?
But then Seok-won added, "Rather than investing in all four semiconductor companies, it would be better to concentrate on the industry leader, Saseong Electronics."
"You mean only Saseong Electronics?"
Not only Kim Jeong-sik but also the other attendees looked at him with puzzled expressions.
"That's right. You all know that the semiconductor industry requires massive capital investment, correct?"
"Of course."
Taking a sip of water, Seok-won continued in a calm tone.
"This year alone, Saseong Electronics is investing over 1.2 trillion won in semiconductor R&D and expanding its 16-megabit DRAM production line."
"...."
"With such a massive investment from the industry leader, how much more money do you think TG, Hyunwoo, and Daegwang will have to pour in just to catch up, given that they have only now managed to develop a 4-megabit DRAM?"
Kim Jeong-sik, who hadn't fully considered this aspect, had an ah-ha moment.
"While it's clear that the semiconductor market will continue to thrive, apart from Saseong Electronics, the other three companies will have to reinvest all their earnings into R&D and factory expansions just to stay in the game."
"...."
"In short, they may look good on the surface, but they won't be profitable in the long run."
In reality, TG, Hyunwoo, and Daegwang Electronics would go on to suffer massive deficits while pushing their semiconductor businesses forward. Later, during the IMF crisis, they either merged with other firms or were acquired by larger corporations in the process of restructuring.
"Now that I think about it, you're absolutely right, Director."
Kim Jeong-sik nodded in agreement.
"That said, I'm not saying the other companies are bad investments. Let's take a long-term position on Saseong Electronics while handling the other three with short-term trading strategies."
"Understood."
The other attendees, listening to the conversation, once again marveled at Seok-won's sharp economic insight and exceptional judgment.
Of course, they already knew about his abilities, but witnessing them in action never ceased to impress.
At his age, most people had only just earned the title of assistant manager.
How could someone so young possess such expertise?
Regardless, the meeting continued in a similar manner, with each team presenting their investment plans while Seok-won pointed out issues and suggested improvements.
After more than an hour, as the meeting neared its end, Seok-won glanced at the slightly fatigued team leaders and offered one final investment tip.
"The yen is showing extreme strength, fluctuating around 79 yen per dollar. However, considering that neither the Japanese government nor the U.S. is particularly pleased with this situation, I doubt this trend will last long."
"...!"
"Are you suggesting that the yen might shift toward a weaker trend?"
One of the team leaders cautiously asked the question, and Seok-won responded without the slightest hesitation, his voice full of confidence.
"That's right. If that happens, it won't be great for Korea's export-driven economy. Keep that in mind when managing our funds."
"…Understood."
Given the current market conditions, there was no clear sign that the yen would weaken anytime soon.
However, this was Seok-won speaking—the man who had never once failed in an investment since joining the company and had consistently delivered jaw-dropping returns. His words couldn't be taken lightly.
"Aside from export-related stocks, we should also increase our investment in insurance stocks."
"Insurance stocks?"
Choi Ho-geun, the leader of Team 4, raised his head and asked.
"It's unfortunate, but ever since last year, we've seen a series of major disasters and accidents, including the collapse of Seongsu Bridge. With social anxiety growing, more people will likely seek insurance as a precaution."
At that moment, Kim Jeong-sik let out a low exclamation, immediately grasping Seok-won's point.
"If the number of policyholders increases, insurance companies' profits will rise, driving up their stock prices!"
"Ah, that's what you meant."
"That makes perfect sense."
"Now that I think about it, it's obvious, but I completely overlooked it."
The other team leaders soon joined in with their exclamations of admiration.
Even when looking at the same situation, Seok-won saw things from an entirely different perspective—it was something they all clearly felt.
"Also, the outlook for telecom stocks looks promising, so let's increase our investments in that sector as well."
"Understood."
The team leaders responded in unison, diligently jotting down Seok-won's words in their notebooks.
***
Daehung Group Headquarters
— Chairman's Office
A heavy atmosphere filled the room as Chairman Park Tae-hong sat at the center.
To his sides sat his eldest son, Park Jin-hyung, the company president, along with Secretary-General Gil Sung-ho and Min Pil-gi, the president of Mido Department Store.
Chairman Park set down the bidding document in his hands and spoke in a deep, measured tone.
"So, the acquisition team has come up with a bid of 220 billion won."
Sensing his hesitation, Min Pil-gi quickly responded.
"Yes, sir. That is 70 billion won higher than the minimum bid of 150 billion won set by the Seoul Metropolitan Government."
Park Jin-hyung, sitting at the head of the table, looked at his father and added,
"I believe it's a reasonable amount."
"With a premium of over 40%, it seems like a strong offer."
Secretary-General Gil Sung-ho also chimed in, but Chairman Park's expression remained unsatisfied.
"Our competition is Lotte and Utopia. They'll stop at nothing to win this bid. Are we sure this amount will be enough?"
His sharp gaze landed on Min Pil-gi, who was seated on the left sofa.
"Can you confidently assure me that we'll win the bid for the Sampoong Department Store site with 220 billion won?"
"Well…"
Min Pil-gi hesitated, his voice trailing off.
Chairman Park Tae-hong clicked his tongue loudly, making sure everyone could hear.
"Look at this. Even the person who proposed the amount isn't confident."
"But if we raise the bid any further, the financial burden will be too much."
Following President Park Jin-hyung, Secretary-General Gil Sung-ho also voiced his concerns.
"That's right. Winning the bid isn't the end of it—we also have to consider the cost of building the department store. If we're not careful, our debt could spiral out of control."
"So what? Are you just going to let Lotte and Utopia take the Sampoong Department Store site?"
Chairman Park flared up, his sharp gaze sweeping over the three men. None of them could respond.
They all knew that in the increasingly fierce battle of department stores, securing the Sampoong site was essential to avoid falling behind.
"This isn't just about winning or losing—it's a fight for the very survival of our group."
With a determined look, Chairman Park pondered for a moment before reaching for the fountain pen lying on the table.
Then, without hesitation, he drew two lines through the original bid amount and wrote a new figure below it.
[￦ 250,000,000,000]
"…!"
Min Pil-gi's eyes widened as he confirmed the amount. Gil Sung-ho, too, couldn't hide his shock.
"250 billion won… Are you serious?"
President Park Jin-hyung asked, his face set in stone.
They knew he was desperate to win the Sampoong site, but they hadn't expected him to go so far as to stake such a massive sum.
"If we want to crush the competition, we have to bet this much."
Chairman Park set down his fountain pen and leaned back.
"And if we still lose, then that land was never meant to be ours."
The bid was a staggering 100 billion won above the minimum price—a clear case of overpaying.
Chairman Park was well aware of the group's precarious financial situation. Had it not been for the massive profits Seok-won had brought in, he wouldn't have dared to propose such a figure.
"Submit this bid."
At his command, Min Pil-gi hesitated and looked at the two men sitting across from him, his eyes silently asking, Are we really doing this?
Park Jin-hyung and Gil Sung-ho exchanged glances before giving small nods.
Judging by Chairman Park's resolute expression, it was clear that trying to dissuade him would be futile.
With a dry swallow, Min Pil-gi picked up the bid document.
"Understood."
Leaning back against the sofa, Chairman Park exhaled as if a weight had been lifted.
"The results will be announced tomorrow afternoon, right?"
"Yes. The announcement is scheduled for 1 PM."
"We've done everything we can. Now, we leave the rest to fate."