"Paparazzi": the Observers of the Stock Market

A new job of reporting unfair behavior is coming in the Stock Exchange. It is the "stock value manipulation paparazzi". It is similar to reporting a violation of traffic regulations or throwing wastes and getting rewarded. Kosdaq after the Stock exchange uttered enforcing of reward on such reporting from 1st July on 11th.

The Stock Exchange has enforced it since 1st. Bae Jungdeuk, the vice chief of the department of market observation said, "It is impossible to observe all the cases because the Exchange is short of hands. Paparazzi will be effective because they could easily grasp the rumors within the market and direct information from wrongdoers"

The maximum amount of reward for reporting a manipulation the stock price using closed information is around 10 million won in the Stock Exchange and Kosdaq.

Sung Inmo Kosdaq Supervision Planning Team leader of Korean Securities Dealer Association said, “Some people would take it as their full-time job. We are concerned about the void reports and rush of intentionally harmful reports, which will jam our business.”

Stock value monitoring department of the Stock Exchange has been receiving reports through the Internet since 1st of Jun. So far, 6 cases were reported.

The reports say that there might be maneuvering parties when the price of A stock rises rapidly more than 15%, or the price of B stock stays on its maximum price for a few days for no reason. Even one of the reports said that the it was a imaginary price quotation when a massive order suddenly disappeared.

Manager Bae Jungdeuk and Team leader Sung Inmo said, △ the reports have to be very specific, △ reward is paid not only when a report is made, but when the punishment of the case has been determined, △ the reporter has to disclose his identity.

When reporting, the Internet homepages of either the Stock Exchange (www.kse.or.kr) or ‘Korea Stock Exchange Watchdog’ or Kosdaq Committee (www.kosdaqcommittee.or.kr) can be used.

Eun-Woo Lee Suk-Ho Shin libra@donga.com kyle@donga.com