Gov’t home shopping workers fined for insider trading
Seven employees of Public Home Shopping and one of the state-run retailer’s subcontractors were collectively fined 480 million won ($410,000) in September for making unfair profits by trading stocks using undisclosed insider information, the Financial Services Commission (FSC) said Monday.
In 2017, they bought Naturalendo Tech shares after realizing in advance that sales of EstroG-100 would resume on Public Home Shopping.
Naturalendo Tech suspended sales of EstroG-100 in 2015 after the Korea Consumer Agency claimed it had detected fake ingredients in the firm’s best-selling product.
Since the Ministry of Food and Drug Safety had confirmed the product’s safety in July 2017, the drug maker announced it would resume sales of EstroG-100, and the Naturalendo Tech shares doubled within a month.
The home shopping employees and the subcontractor profited as they resold their shares.
Their unfair trading was first revealed in 2017, but the government punished them two years later.
According to the FSC, the subcontractor was fined the heaviest, 190 million won, as he made the largest profit.
One of the home shopping employees was fined 4.8 million won for just sharing the undisclosed information with another employee, despite not making profits through insider trading.
“Even if traders are not employees of listed companies, they can be punished if they trade listed companies’ stocks with information related to their jobs,” an FSC official said.
The FSC also referred six fulltime private investors to prosecutors during the third quarter of 2019 as they were alleged to have been involved in market manipulation.
The Financial Services Commission’s main building in Seoul