Current journalists arrested for profiting 9.3 billion won through stock-inflating articles

A criminal ring, including current journalists, has been apprehended for allegedly pocketing 9.31 billion won through a sophisticated stock manipulation scheme. The group exploited "special feature" articles to inflate stock prices before selling their holdings, a practice known as front-running.

The Financial Supervisory Service's special investigators have referred two cases to prosecutors, involving over 2,100 articles used to generate illicit profits. In the first case, an accountant allegedly conspired with three journalists to pre-purchase stocks of companies featured in upcoming articles. They then sold these stocks after the articles were published and the prices rose, accumulating 8.56 billion won over approximately four years and eight months. Two additional individuals were recruited to aid in this operation.

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We have uncovered two cases of fraudulent trading involving articles on special features written by current journalists and have sent them to prosecutors with recommendations for indictment.

The second case involved a single journalist who allegedly engaged in similar front-running activities independently. From October 2022 to July 2024, this journalist reportedly used around 300 "special feature" articles to gain 750 million won. The journalist allegedly bought stocks through personal and borrowed accounts before publication, then used their influence to release the articles at opportune moments to maximize profits upon selling.

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Investors may become targets of investment fraud, market manipulation, or front-running schemes if they invest solely based on article titles mentioning 'special features,' 'related theme stocks,' or 'soaring stocks.'

Financial authorities noted that articles were typically published just one minute after the pre-purchase of stocks was completed, and the stocks were sold an average of three minutes after publication, realizing an average profit of 2 million won per transaction, with a maximum of 38.23 million won in a single instance. The ringleader of the first case and the journalist from the second case have been arrested, while four others were sent for prosecution without detention.

The Financial Supervisory Service is urging investors to exercise caution, warning that articles highlighting "special features," "related theme stocks," or "soaring stocks" can attract fraudulent schemes and market manipulation. The agency vows to continue monitoring for activities that undermine fair market order and harm ordinary investors, promising strict investigations into any violations.

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We will continue to monitor activities that undermine the fair trading order of the capital market and harm ordinary investors, and will strictly investigate and investigate illegal activities when discovered.