Financial Authorities: no second chances on unfair stock trading --HYBE chairman eyed as first major case

Since President Lee Jae-myung's inauguration, the government has been making strong messages to warn anyone trying to cheat in the stock market.

Today, authorities announced specific measures with a new task force.

Our Kim Do-yeon explains.

No second chances — that's the message from Korea's financial watchdogs on unfair trading, illegal short selling, and false disclosures.

On Wednesday, the Financial Services Commission, the Financial Supervisory Service, and the Korea Exchange unveiled measures to fight market abuses, launching a joint task force to track and investigate violations.

"Accounts linked to illegal gains will be frozen during investigations. Fines of up to twice the profits will be imposed, along with restrictions on trading and executive appointments. Through these measures, we aim to ensure that stock manipulators are immediately expelled from the capital market under a strict one-strike-out policy."

When the joint task force begins operations later this month officials from the three entities will work in the same office and make sure investigations are finished within six months.

This is in line of the new administration's agenda as President Lee Jae-myung early last month chose the Korea Exchange for his first public event since inauguration and emphasized a fair stock market.

Under this tougher stance, HYBE chairman and BTS creator Bang Si-hyuk could become the first high-profile case.

The Securities and Futures Commission is set to refer him to prosecutors for alleged fraudulent transactions under the Capital Markets Act.

He is accused of telling early investors in HYBE that he had no plans to go public and leading them to sell their shares at low prices to private equity funds set up by his acquaintances.

A year later, the company did go public and Bang allegedly shared the proceeds from the later stock sales, taking around 200 billion won or around 150 million U.S. dollars.

Financial authorities have reportedly secured evidence that Bang was preparing for an IPO while telling the early investors otherwise.

Separately, the Seoul Metropolitan Police Agency's financial crimes unit, which has been conducting its own investigation, is also expected to hand over the case to prosecutors soon.

To this, HYBE explained that the IPO process was done according to the law and that it has been cooperating with the authorities to confirm the facts.

Kim Do-yeon, Arirang News.