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SEOUL, Feb. 11 (Korea Bizwire) — Two former employees of a major South Korean law firm were sentenced to prison on Tuesday after a court found they had secretly accessed lawyers’ emails to obtain confidential deal information and used it to trade stocks for millions of dollars in illicit gains.
The Seoul Southern District Court sentenced one defendant, identified as A, to three years and six months in prison, along with a fine of 6 billion won and forfeiture of approximately 1.82 billion won in illegal profits.
A second defendant, B, received a three-year sentence, a 1.6 billion won fine and forfeiture of roughly 527 million won. The court did not order their immediate detention, citing a low flight risk.
Prosecutors said the two men, who worked in the firm’s information technology department between September 2021 and December 2023, used an administrator account to access the emails of corporate advisory lawyers. From those messages, they obtained nonpublic information about share buybacks, capital increases and other market-moving transactions.
Investigators concluded that A reaped about 1.82 billion won in illicit gains and B about 527 million won. The two allegedly funneled money through accounts in family members’ names and even took out loans to finance the trades.
In its ruling, the three-judge panel described the crimes as deliberate and damaging to market integrity. “The defendants actively sought out information and unlawfully accessed lawyers’ emails,” the court said, calling the offenses serious violations that undermined fairness and trust in the capital markets.
The judges also noted that the defendants repeatedly changed their statements during the investigation and attempted to downplay their conduct until confronted with evidence.
They were further criticized for purchasing luxury imported cars and apartments with the proceeds, then selling those assets when the Financial Supervisory Service began its inquiry in an apparent effort to avoid forfeiture.
The defendants acknowledged most of the charges but disputed certain counts, arguing that some trades predated their access to sensitive information. One also challenged the prosecution’s calculation of profits. The court rejected those claims.
The case stemmed from a referral by the Securities and Futures Commission to prosecutors in early 2024. Authorities said the defendants had access to confidential information related to advisory work on transactions including a tender offer by MBK Partners for Korea & Company. Stocks traded during the period included Rainbow Robotics, Osstem Implant, Mediana, Korea & Company and SNK.
The ruling marks one of the more significant recent insider trading convictions in South Korea, underscoring regulators’ efforts to police the misuse of privileged corporate information in a market that has drawn increasing scrutiny over fairness and transparency.
Jerry M. Kim (jerry_kim@koreabizwire.com)
