Maeil Business TV Employees Probed for $750,000 Stock Trading Scheme

South Korea's Financial Supervisory Service (FSS) has launched an investigation into employees of Maeil Business TV, a financial news channel, for suspected front-running. The FSS's special investigation unit reportedly raided the broadcaster's headquarters to secure evidence related to allegations that employees used non-public, positive information about specific stocks to purchase them before broadcasting recommendations. After the broadcast, when stock prices rose, they allegedly sold these shares for illicit profits.

The investigation is said to have uncovered evidence of trading in approximately 300 different stocks, with illicit profits estimated to exceed 1 billion won (approximately $750,000 USD). The FSS believes the number of stocks and the total profit amount could increase as the investigation progresses.

This case is significant as it represents the first independent investigation initiated by the FSS's special investigation unit. Previously, such probes required a referral or notification from the Securities and Futures Commission. This new approach, following a resolution from a special investigation review committee comprising members from the Financial Services Commission and the FSS, allows the unit to commence investigations based on its own findings.

Front-running, the practice of trading securities based on advance, non-public knowledge of a future transaction that is likely to affect the price of the securities, is a serious offense in financial markets. The alleged actions by Maeil Business TV employees undermine market integrity and investor trust.