‘Financier’ of Deutsch Motors stock price manipulation case found guilty of aiding and abetting

Mr. Son, the \

Former Deutsch Motors Chairman Kwon Oh-soo, who went on trial for manipulating the company’s stock price, has been given a suspended prison sentence on appeal. Mr. Son, who was accused of acting as a “financier” and participating in the stock manipulation, was convicted of aiding and abetting. The decision is likely to affect the prosecution’s handling of First Lady Kim Keon-hee who is also under investigation for allegedly playing a similar role to Son.

The Seoul High Court’s Criminal Division 5 on September 12 sentenced Kwon to three years in prison and four years of probation for manipulating Deutsch Motors’ stock price, a violation of the Capital Markets Act. It is longer than the original sentence of two years in prison and three years of probation. Blackpearl Invest CEO Lee Jong-ho, who led the second stock price manipulation operation and acted as a control tower, and Mr. Kim, who was the “main armament” (the person who executed the manipulation), was sentenced to two years in prison and three years’ probation, the same as in the first trial. Lee was accused of lobbying for Lim Seong-geun, former commander of the Marine Corps 1st Division, after the death of Marine Corps Corporal Chae Su-geun.

Son, who was charged with conspiracy to manipulate stock prices and acquitted in the first trial, was found guilty of aiding and abetting on appeal and sentenced to six months in prison and one year of probation. The prosecution added the charge of aiding and abetting stock price manipulation to the preliminary indictment during the appellate trial. The court found the same as in the first trial that the main participants, including former Chairman Kwon, engaged in price manipulation. It said, “It is sufficient to establish a conspiratorial relationship between Kwon and the ‘main armament’ to manipulate the market price.” As for Kwon, the court found that he was “highly likely to be blamed for denying any wrongdoing.”

As for Son, the court found that he “was not merely a ‘financier’ who lent money, but was involved in the second market manipulation,” and that he “was aware of the market manipulation and took advantage of it by buying shares in large quantities for his own benefit.”

Kwon was indicted in October 2021 on charges that he conspired with stock price manipulators, investment advisors, and former and current employees of securities firms to manipulate Deutsch Motors‘ stock price from December 2009 to December 2012. Prosecutors say they used 157 accounts belonging to 91 people to fraudulently drive up its stock price from around 2,000 won to some 8,000 won.

The court judged that the three-year period of stock price manipulation was divided into the first operation (from December 23, 2009 to October 20, 2010) and the second operation (from October 21, 2010 to December 7, 2012) based on the change of the “main armament” and that the statute of limitations remained open for the stock price manipulation act committed during the second operation. Accordingly, it ruled that the first operation was dismissed and determined the guilt or innocence of the second operation. Both the first and second trials admitted that three accounts belonging to the first lady and one account belonging to her mother, Choi Eun-soon, were used to manipulate the stock price during the second operation.

※This article has undergone review by a professional translator after being translated by an AI translation tool.