Prosecutors yesterday said an investigation would continue into the source of alleged leaks from within the judiciary that reportedly led to insider trading by CTBC Financial Holding Co (中信金) and Gobo Group (國寶集團) executives, who allegedly short-sold stocks to generate illegal profits totaling NT$8 million (US$252,525 at the current exchange rate).
The Taipei District Prosecutors’ Office yesterday said the questioning of 19 people — suspects, witnesses and other persons of interest in the case — was completed late on Monday night.
All 19, including two members of the media, have been released without being required to post bail.
On June 8, the Supreme Prosecutors’ Office’s Special Investigation Division led raids on the homes and offices of prominent financier Jeffrey Koo Jr (辜仲諒) and other CTBC Financial Holding and Gobo Group executives as part of a major judicial probe into alleged insider trading, real-estate transaction irregularities and illegal transfers of company funds.
Investigators later uncovered evidence of unusual transactions on June 7 and 8, in which traders short-sold CTBC shares, saying trading on the two days was close to 10 times the usual daily volume for CTBC share transactions.
Through advance knowledge of the raids, the traders generated an estimated NT$8 million in profits through short sales, with investigators suspecting financial operators of colluding with a group of vulture investors, reportedly led by a man surnamed Wang (王), who had inside help from sources inside units of the judicial investigation.
While all 19 individuals denied wrongdoing, saying they acted on past trading experience or allowed their brokers to make decisions for them, prosecutors said they had gathered sufficient evidence and planned to charge some suspects with insider trading and violations of the Securities and Exchange Act (證券交易法).
As the media had arrived at the offices and residences of the executives before the raids began, suspicion was raised that officials participating in the investigation had leaked information.
Investigators said the group of vulture investors had in the past illegally made huge profits through other financial irregularities and insider trading involving leaks from sources inside the judiciary, adding that the collusion might also have involved members of the media and government officials.
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