The Financial Services Commission (FSC) launched the Capital Market Investigation Agency on September 17 to monitor unfair trade practices such as stock price manipulation.
The organization announced on the preceding day that it established the agency under the direct control of the FSC secretary-general to be staffed by 18 members from the FSC, the Ministry of Justice, the Financial Supervisory Service (FSS), and the Korea Exchange.
Kim In, head of the new agency, said, “The team will be notified of information related to unfair trade practices and divide them into urgent and non-urgent cases, allowing for the necessity of forced investigation and social impact, and then assign the cases to the authorities concerned for a more effective investigation.” He continued, “Also, it will bring some of the cases to the prosecution on a fast track basis for swift punishment if, for example, the arraignment of prescription needs to be halted.”
In a case when forced investigation based on search and seizure is required, the FSC will conduct probes alone or with the FSS if necessary. The officers in the team are going to be granted with the right of compulsory investigation by the Public Prosecutor General next month. Non-urgent cases are slated to be handled by the investigation bureau in the FSS.
In short, the agency is planned to function as a control tower for monitoring unfair practices and overseeing the investigation between the event recognition and prosecution phases. It is going to introduce penalties against market abuse activities as well by amending the Financial Investment Services and Capital Markets Act so as to better cover the unfair actions in the stock market subject to criminal punishment.