Prosecutors Raid Meritz Securities for Suspected Insider Trading

Prosecutors recently carried out a raid at Meritz Securities due to suspicions of insider trading using undisclosed information by former executives of Meritz Fire & Marine Insurance. The Financial Investigation Division 1 of the Seoul Southern District Prosecutors’ Office, headed by Chief Prosecutor Lim Sejin, conducted a search and seizure at Meritz Securities’ headquarters in Yeongdeungpo-gu, Seoul.

Last year, in July, the Financial Services Commission’s Securities and Futures Commission filed a complaint accusing a former president of Meritz Fire & Marine Insurance, identified as Mr. A, and an executive-level official of violating the Capital Markets Act through the use of undisclosed information. It was discovered that in November 2022, they had prior knowledge of the planned merger between Meritz Fire & Marine Insurance and Meritz Securities under Meritz Financial Group. Subsequently, they used family accounts to purchase stocks. Once the merger plan became public, and the share prices of Meritz Financial Group and related stocks rose, they sold their holdings, making illicit profits totaling several hundred million won.

In September last year, prosecutors also conducted a search and seizure at the offices of Meritz Financial Group and Meritz Fire & Marine Insurance in Gangnam-gu, as well as at the suspects’ residences in connection with this case.

The investigation into the allegations of insider trading and the use of undisclosed information by former executives of Meritz Fire & Marine Insurance has been ongoing since the complaint was filed by the Financial Services Commission’s Securities and Futures Commission. The coordinated efforts of the Financial Investigation Division 1 of the Seoul Southern District Prosecutors’ Office, under the leadership of Chief Prosecutor Lim Sejin, aim to uncover the full extent of any potential fraudulent activities in this case.

The case underscores the importance of transparency and adherence to regulations in the financial sector. Insider trading, using undisclosed information to gain an unfair advantage in the markets, is prohibited by law to ensure a level playing field for all investors. The prosecution’s actions in conducting the raid and subsequent investigations demonstrate the commitment to upholding the integrity of the financial markets and holding accountable those who seek to profit through illegal means.

As the investigation progresses, more details may come to light regarding the extent of the alleged insider trading scheme involving former executives of Meritz Fire & Marine Insurance. The outcome of the investigation will provide insight into the potential repercussions and legal consequences for those involved in such illicit activities.