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Meritz Securities headquarters in Yeouido, Seoul. (Photo = Meritz Securities) |
[Alpha Biz= Kim Jisun] Two former executives of Meritz Fire & Marine Insurance have been referred to prosecutors for allegedly using undisclosed information about a corporate merger to gain illicit profits.
According to financial industry sources on July 17, the Securities and Futures Commission (SFC) under the Financial Services Commission decided at a regular meeting the previous day to file a criminal complaint against former Meritz Fire President A and executive B. They are accused of violating Article 174 of the Financial Investment Services and Capital Markets Act, which prohibits the use of undisclosed material information.
The executives allegedly purchased a large number of Meritz Fire shares, even involving family members, before the merger plan of Meritz Financial Group was publicly announced. They reportedly gained over KRW 500 million (approx. USD 360,000) each by selling the shares after the stock price surged following the announcement.
Although the accused claimed the purchases were made without prior knowledge of the merger plan, financial authorities judged their trading patterns to be irregular and indicative of insider trading.
Meritz Financial announced on November 21, 2022, that it would fully acquire Meritz Fire and Meritz Securities as wholly owned subsidiaries while expanding shareholder returns. The stocks of all three companies hit their upper trading limits the day after the announcement.
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
