Operator of online trading community arrested on stock manipulation charges

▲ Kang Ki-hyeok (C), the operator of an online stock trading community suspected of stock manipulation, enters the Seoul Southern District Court to attend a hearing on the issuing of his arrest warrant on July 12, 2023. (Yonhap)

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Operator of online trading community arrested on stock manipulation charges

SEOUL, July 12 (Yonhap) -- The operator of an online trading community was arrested Wednesday on stock manipulation charges.

The Seoul Southern District Court issued an arrest warrant for Kang Ki-hyeok, who runs a stock trading community on a portal website, along with two other members of the community site, citing a flight risk.

Prosecutors had sought the arrest warrant for the trio for allegedly generating 35.9 billion won (US$27.9 million) in illicit profits. They were accused of having manipulated stock prices of five companies -- Dongil Industries Co., Manho Rope & Wire Ltd., Pangrim Co., Taihan Textile Co. and Dongil Metal Co. -- through an "order matching" technique.

Shares in these five companies crashed by a daily-permissible 30 percent on June 14, prompting the Korea Exchange to suspend their trading, and prosecutors and financial authorities had already begun suspecting Kang and the others of unfair trading prior to the crash. Kang's website was targeted because those shares had all been recommended there and it had been suspected in a similar prior case. Prosecutors raided Kang's home and office on June 15 and applied for the arrest warrant last Thursday.

In a statement released through his attorney, Kang maintained that he had merely purchased stocks as a minority shareholder and he had no reason to artificially drive up any share prices. Kang also claimed that there isn't enough evidence to prove he had engaged in any stock manipulation.

He reiterated his denial to the media earlier Wednesday before attending the hearing on his arrest warrant.

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