Go to contents

3 people involved in stock price crash caused by Societe Generale SA are arrested

3 people involved in stock price crash caused by Societe Generale SA are arrested

Posted May. 11, 2023 07:41,   

Updated May. 11, 2023 07:41


The prosecutor arrested three people who are believed to have been involved in the stock price crash caused by Societe Generale SA, including Ra Deok-yeon, chairman of an H investment consulting firm. It is unusual for the prosecutor to seek arrest warrants without going through the subpoena process, which shows that the criminal charges of the case have been largely confirmed and the nature of them is serious. Over 1,000 investors were involved in the case, with a total investment amount of one trillion won. The details of the large-scale stock price manipulation should be found through a quick and thorough investigation.

First of all, the investigation should focus on proving the suspicion that the main culprits intentionally raised the stock price. It is suspected that Chairman Ra manipulated the stock price by selling stocks on one end after receiving mobile phones and stock accounts from investors and buying them on the other end. The suspicion of tax evasion by receiving part of profits as fees through over 20 corporations, including a driving range and a gallery, should also be investigated. Another task is retrieving the proceeds of crime that were siphoned off through an overseas golf course.

It is shocking to see the names of prominent figures in the political, business, press, and medical circles for having been involved in the case. Some such figures include former special prosecutor Park Yeong-soo who worked as a legal advisor for two companies owned by Ra, Jang, who served as a member of the National Assembly’s Public Service Ethics Committee and introduced investors to Ra, and the chief director of a research center under C newspaper Kim who worked as an advisor at a press company recently acquired by Ra. Details of their crimes should be thoroughly identified. The investigation should be conducted into the doctors, lawyers, and celebrities who made large investments. They might have been accomplices if they had known how investments were made, even if they claim to be victims.

It should also be found out how major shareholders who know very well about the company's internal matters sold stocks they owned right before the stock price crash to gain massive profits. The chairman of Daou Kiwoom Group earned 60.5 billion won by selling stock options four days before the crash. The chairman of Seoul City Gas also sold his stocks three days before that to cash out 45.7 billion won. They are indeed remarkable timings to be simply considered as coincidences. It should be found out if inside information was used in the process of selling stocks at peak.

Stock price manipulation is a major crime that destroys trust in the capital market and produces a number of victims. Such a crime continues because its punishment is very lenient to a level that some even say is profitable even if you go to jail. Some of those who served sentences in jail and were released tried stock price manipulation again. The latest case should be rigorously investigated to punish its culprits as a warning to others. Institutional improvement on the exposure of stock price manipulation and restrictions and punishment for it should also be followed. It should be used as an opportunity to establish clear principles that financial crimes will only lead to utter ruin.