Financial Services Commission. (Photo: Financial Services Commission)

 

[Alpha Biz= Kim Jisun] Ahead of a tender offer, employees of a listed company and a law firm have been reported to the prosecution for profiting from insider information.


The Securities and Futures Commission of the Financial Services Commission announced last Thursday that it had filed a complaint with the prosecution against employees of the listed company who used tender offer information to buy stocks, realizing profits after the stock price rose following the information disclosure. These actions were in violation of the Capital Markets Act, which prohibits the use of non-public material information.


According to the Securities and Futures Commission, Mr. B, an employee of Company A, a listed company, shared information about the 2023 Q4 tender offer with acquaintances, leading them to use it for stock trading, thus making illegal profits amounting to several billion KRW.


The tender offer price is typically calculated by adding a premium to the current stock price to encourage sales, so it is highly likely to cause the stock price to rise, and the market usually sees it as a "positive development."


Three employees from Law Firm C, which provided legal advice on the tender offer, learned of the tender offer information for three companies between 2021 and 2023 during their work with the firm. They used their own or nominee accounts to directly purchase the stocks or had acquaintances buy them, thereby making illegal profits amounting to hundreds of millions to billions of KRW.


In particular, two of the individuals used non-public information regarding capital increases and stock transfer agreements involving a change in the major shareholder of two other companies that Law Firm C advised on, making unlawful gains before the information was publicly disclosed.

 

 

 

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