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Goldman Sachs Korea raided for alleged stock price manipulation

August 26, 2015

(AP Photo)

By Kim Se-jeong

Prosecutors announced Tuesday that they raided the offices of Goldman Sachs Korea, ING Life Insurance and Macquarie Investment Management Korea last week to investigate allegations that the firms were involved in stock price manipulation.

They also arrested an ex-executive of Goldman Sachs Korea, who now heads a consulting firm, on charges of abetting in stock price rigging in return for money in 2011.

The suspect surnamed Kim, 49, is suspected of introducing stock price manipulators to officials at Macquarie and ING to help them sell 630,000 shares of DongYang P&F to the foreign-invested financial firms at inflated prices.

Investigators said that Kim, a Korean-American, allegedly received hundreds of millions of won from the manipulators.

Several former and incumbent officials at Macquarie and ING are also under investigation, according to the prosecution.

Earlier this year, prosecutors arrested four people on suspicion of their involvement in the stock price manipulation scheme.

To sell DongYang P&F shares listed on the tech-heavy Kosdaq market at higher prices, they allegedly raised the price from 10,000 won per share to 14,800 won between March and April in 2011 through illicit means.

The four approached Kim, asking him to help them contact fund managers at the financial firms who would by the shares at the inflated price.

Kim and other officials at the firms are suspected of having taken money from the manipulators in return for the purchase.

Prosecutors also raided SK Securities and two other Korean asset management companies for their alleged involvement in the stock price rigging.