South Korean financial police raid Maeil Business TV over stock manipulation allegations

South Korea's financial watchdog has raided the offices of Maeil Business TV as part of an investigation into alleged stock price manipulation by its employees. The Capital Markets Special Judicial Police (특사경) of the Financial Supervisory Service (FSS) seized relevant data from the broadcaster's headquarters in Seoul.

The investigation centers on suspicions that three employees of Maeil Business TV engaged in 'front-running' schemes. This practice involves buying stocks of companies expected to release favorable news before the information becomes public. After recommending these stocks on air, the employees allegedly sold their holdings once the ensuing buying pressure drove up the stock prices, thereby pocketing illicit profits.

Sources indicate that the total illicit gains accumulated through these alleged front-running activities across more than 300 different stocks could exceed 1 billion won (approximately $750,000 USD). The individuals involved are reported to include producers, hosts, and guests of the financial broadcasting programs.

This raid marks a significant development as it is the first investigative case initiated independently by the FSS's special judicial police. Since the revision of the enforcement rules for capital market special judicial police in April, they have been granted the authority to launch their own investigations. Previously, they were required to go through the Securities and Futures Commission of the Financial Services Commission for referrals or notifications to prosecutors when uncovering potential market irregularities.