South Korean regulators are ramping up their pursuit of stock-market manipulators, expanding a high-profile joint task force to investigate nearly 10 cases as the new administration seeks to deliver on promises of a cleaner, tougher financial marketplace.
The Joint Response Team—comprising the Financial Services Commission (FSC), the Financial Supervisory Service (FSS), and the Korea Exchange—has moved beyond its initial five probes and is now reviewing a wider slate of suspected market abuses, according to officials familiar with the operation. The task force was formed last year under President Lee Jae-myung’s policy slogan that “market manipulation leads to financial ruin,” signaling a deliberate shift toward stricter penalties and faster enforcement.
“We have continued to identify and investigate new cases even after the first two were publicly announced,” a senior financial regulator said. “Our goal is to deliver concrete results as early as possible.”
The first major case targeted a group of seven individuals—including owners of hospitals, clinics and private academies, along with a senior finance executive—who are suspected of reaping roughly 40 billion won ($30 million) in illegal profits. In a first use of newly strengthened powers, authorities froze the suspects’ brokerage accounts to prevent further investor losses.
A second case involved a senior executive at NH Investment & Securities accused of insider trading worth about 2 billion won. These early moves were designed to send a deterrent message, but officials say the task force is now building momentum to tackle a broader range of violations.
Yet the push faces practical hurdles, most notably a shortage of digital forensic specialists needed to unravel complex trading schemes. FSS Governor Lee Chan-jin recently acknowledged that delays in investigations are partly due to a lack of expertise in analyzing mobile phones and other digital evidence. Of the four FSC officials on the team with legal investigative authority, only one specializes in digital forensics.
“Forensic work has not yet been completed in all ongoing cases,” Governor Lee said. “We are in discussions with the Financial Services Commission to significantly strengthen this area.”
Plans are underway to increase forensic staff and assign additional support personnel from the FSS. The task force is also considering forming a second investigative team, a move that would align with President Lee’s recent suggestion to expand the unit by one or two teams. Currently, the joint team has 37 members; increasing that to around 50 would allow a significant rise in the number of cases handled concurrently.
For now, only high-priority cases selected through a fast-track screening process are handled directly by the joint team, while other allegations are referred to the FSS’s investigation bureau, which recently added nearly 20 positions. The goal, officials say, is to build a system capable of pursuing not only large-scale manipulation but also smaller infractions that erode retail investor trust.
“The government is trying to change the perception that market abuse is a low-risk, high-reward game,” said Park Jae-hyun, a financial law professor at Sogang University. “But to do that, they need more than tough rhetoric—they need the technical capacity to investigate quickly and the judicial follow-through to impose penalties that actually sting.”
As the task force widens its net, its performance is being closely watched by investors and policymakers alike. Success could help restore confidence in a market long shadowed by manipulation scandals; failure could reinforce cynicism about the state’s ability to police its own financial playground.
