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| The Korea Exchange building in Seoul / Yonhap |
By Lee Min-hyung
The Korea Exchange is being urged to bolster the monitoring of unfair trade practices, as it investigated only 27 cases involving such violations in the first half of this year, data showed Friday.
According to data compiled by Rep. Yoon Young-deok of the main opposition Democratic Party of Korea, the exchange operator monitored a total of 109 unfair trading practices in 2021 and 105 in 2022. But the number fell by around half in the first half of 2023 from a year earlier.
The lawmaker said financial authorities should tighten their investigative and monitoring activities to prevent a recurrence of stock manipulation scandals.
"Supervisory authorities must reinforce their willingness to execute stricter legal sanctions in criminal punishment and confiscation of unfair gains," Yoon said.
A spokesman for the Korea Exchange said the number is forecast to rise further after it finishes an ongoing investigation into a nationwide stock manipulation scandal that erupted in late April.
"Our investigation is on the massive stock price declines of eight listed shares which happened on April 24 and they have not been included in the figure, so the number will rise to a similar level as last year once the investigation comes to an end," the official said.
The abrupt stock fall has tainted the credibility of financial watchdogs, who failed to monitor and preemptively take relevant regulatory measures. Even though they pledged to strengthen monitoring of such suspicious signs of stock manipulation, a similar incident took place again on June 14, less than two months later. This time, the stock prices of five listed shares plummeted for no apparent reason.
Experts said watchdogs cannot avoid criticism over the recurrence of such an incident.
"The major role of financial authorities is to monitor illegal and suspicious signs in real-time, but they have failed to do so twice," Kim Dae-jong, a professor of business administration at Sejong University, said. "The Korea Exchange and the Financial Supervisory Service should improve their monitoring process further to prevent the recurrence of such scandals."
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