I have a question regarding a violation of financial law.. It concerns stocks.

Hello. You have asked whether this conduct amounts to a violation of financial law. A financial law attorney will respond.

Yes, the conduct you describe may amount to the "use of undisclosed material information," that is, insider trading, which is prohibited under Article 174 of the Financial Investment Services and Capital Markets Act, and it is subject to criminal punishment for violation of financial law.

Under that Act, a person who comes to know undisclosed material information relating to a listed company through his or her duties is, in principle, prohibited from using that information to trade the company's stocks in his or her own name or in another person's name.

Information on a business combination such as a merger constitutes "material information" that has a significant effect on the stock price, and trading that uses such information before its disclosure may be regarded as insider trading in violation of financial law.

In particular, even where stocks are purchased not only in one's own name but also in the name of a family member or an acquaintance, a person may be found to be an accomplice if there was an act of providing the information or inducing the trade.

Insider trading may be subject to severe punishment, such as imprisonment for a definite term of one year or more, or a fine equal to four to six times the unjust gains.

In addition, one may be investigated and sanctioned by the Financial Services Commission.

In the present situation, it appears important to consult a financial law attorney well versed in the Financial Investment Services and Capital Markets Act, to analyze how the information was obtained, how the trades were made, and the scale of the unjust gains, and to prepare a defense strategy for the violation of financial law.