Seoul Southern District Court accepted a quasi-appeal on May 24 from a suspect in the DI Dongil stock manipulation investigation, challenging evidence collection procedures by South Korea's Financial Services Commission (FSC). The suspect argued that Financial Supervisory Service (FSS) employees without legal investigative authority participated in evidence selection, and the court cited the agency's failure to return seized items within the statutory deadline as violating the suspect's right to defense. The case represents the first stock manipulation investigation launched by the joint response team formed after President Lee Jae-myung emphasized crackdown on unfair trading in Korean stocks.
Court Cites Evidence Procedure Violations in DI Dongil Case
Judge Kim Joo-seok of Seoul Southern District Court's Criminal Division 6 granted the quasi-appeal on May 24, according to industry sources on the 27th. The suspect challenged the admissibility of evidence collected by the joint response team, arguing that FSS employees participated in the evidence selection process despite lacking compulsory investigative powers under South Korea's Capital Markets Act. Under current law, only FSC investigation officials hold authority to conduct compulsory investigations including seizures, searches, and on-site inspections, while the FSS is limited to voluntary investigation powers.
The court identified the failure to return seized items within the legal deadline as a violation of the suspect's right to prepare a defense. A quasi-appeal is a legal procedure allowing parties to request a court to cancel or modify decisions made by investigative agencies or judges during trial proceedings.
FSC Charged Suspects with 100 Billion Won Stock Manipulation Scheme
The FSC's Securities and Futures Commission filed charges in March against multiple suspects including wealthy individuals operating general hospitals and large private academies, asset management company executives, and financial institution branch managers. The group allegedly selected DI Dongil, a stock with low daily trading volume, as their manipulation target and deployed 100 billion won through corporate funds under their control and loans from financial companies to artificially inflate prices.
The investigation marked the first case designated for the "stock manipulation crackdown" initiative by the joint response team established shortly after President Lee Jae-myung emphasized the eradication of unfair trading practices. The court's acceptance of the quasi-appeal is expected to delay the investigation timeline.
Financial Services Commission Plans Re-Appeal Against Court Decision
The FSC stated it will pursue re-appeal procedures upon receiving the court's written quasi-appeal decision. The agency has not announced specific filing dates or procedural timelines for the re-appeal process.
FAQ
What did Seoul Southern District Court decide on May 24 regarding the DI Dongil stock manipulation case?
Seoul Southern District Court accepted a quasi-appeal from a suspect challenging the FSC's evidence collection procedures, citing violations including the participation of FSS employees without compulsory investigative authority and failure to return seized items within the legal deadline.
Why did the court question the Financial Services Commission's evidence procedures?
The court found that FSS employees participated in evidence selection despite lacking legal authority for compulsory investigations under the Capital Markets Act, which grants such powers only to FSC investigation officials, and that the agency failed to return seized items within the statutory deadline, compromising the suspect's right to defense.
What charges did the FSC file in the DI Dongil stock manipulation investigation?
The FSC's Securities and Futures Commission charged suspects in March with manipulating DI Dongil stock prices using 100 billion won from corporate funds and financial company loans, targeting a stock with low daily trading volume to artificially inflate prices.
