A One-Strike Market: Seoul’s Bold Plan to Root Out Stock Manipulators (Image supported by ChatGPT)
SEOUL, July 30 (Korea Bizwire) — In a bold bid to restore confidence in South Korea’s financial markets, regulators have launched a new joint task force designed to swiftly identify and stamp out illegal stock trading practices.
The team, which officially began operations Wednesday, brings together officials from the Financial Services Commission (FSC), the Financial Supervisory Service (FSS), and the Korea Exchange. Their mission: to close longstanding enforcement gaps by creating a unified front against market manipulation and other unfair trading activities.
For years, oversight of illicit trading has been spread thin across multiple institutions, often resulting in bureaucratic delays and limited accountability. Now, under mounting pressure from investors and a direct order from President Lee Jae Myung, authorities are moving to tighten the net around bad actors in the market.
“This task force is a critical step toward restoring integrity in our capital markets,” a senior regulatory official said on condition of anonymity. “We’re no longer tolerating a system where manipulators can slip through jurisdictional cracks.”
Starting in October, the stakes will rise significantly. Individuals caught engaging in unlawful stock trading could be fined up to twice the amount of their ill-gotten gains.
The country’s market surveillance system will also undergo a major overhaul—shifting from a traditional account-based model to one that tracks suspicious activity by individual traders. Regulators say the current model leads to over-monitoring and often misses patterns tied to a single person using multiple accounts.
Repeat offenders will face even tougher penalties. Under a forthcoming “one-strike out” policy, those found guilty of market manipulation will be banned from participating in the capital markets for up to five years. They’ll also be barred from trading financial investment products and prohibited from serving as executives at publicly listed companies.
In another striking move toward transparency, major shareholders and corporate executives involved in illicit activity will be publicly named following a decision by the Securities and Futures Commission.
The initiative is part of a broader campaign by President Lee’s administration to enhance market discipline and attract more long-term investment to Korea’s capital markets. As one regulator put it, “We’re putting everyone on notice: market abuse will not be tolerated—and this time, we mean it.”
M. H. Lee (mhlee@koreabizwire.com)
