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Investors who manipulated trading volumes to win prizes were caught by financial authorities in an ETF event hosted by securities companies. This is the first time that unfair trade practices such as market tariff involvement targeting ETFs have been confirmed.
According to the financial authorities on the 10th, the Securities and Futures Committee under the Financial Services Commission imposed a penalty on two individual investors earlier this month on charges of disrupting the market order using ETFs.
They focused on the fact that securities companies are holding ETF-related events and pay different prize money according to individual trading volume. Major domestic securities companies are holding various events such as’ETF transaction audit event’ and’ETF real investment competition’ to induce ETF investment.
Cash and other prizes are awarded to top investors who meet certain conditions by participating in the event. Most of the payment criteria are transaction volume (transaction amount). After applying to participate in the event, the more ETFs traded for a certain period of time, the larger the prize money you can receive.
After they participated in the event, the authorities traded 25 ETFs and submitted a large number of quotations that were unlikely to form a transaction (Sooho Huh Ha), or bought and sold with other parties without the purpose of transferring rights (most/common trade). It was determined that the transaction volume was greatly inflated by means of such methods.
The prize money won in this way is about 200 million won. However, it is known that the transaction itself has resulted in a loss of tens of millions of won. The fluctuation of the stock price was also relatively insignificant.
Accordingly, the authorities concluded that it was judged as an act of disturbing market customs, which is less illegal than market price manipulation (stock price manipulation), and imposed a penalty equivalent to the prize money they won.
The Financial Supervisory Service also started to prepare measures to prevent recurrence, as securities companies held an event based on the ETF trading volume, and this problem occurred.
Reporter Oh Hyeong-joo [email protected]
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