Kim Geon-hee, Deutsche Motors, Our Technology, and Samboo Construction Stock Price Manipulation - Investor Damage and Breakdown of Market Trust Structure

Introduction: While stock price manipulation has ended, the losses remain intact.

The stock manipulation allegations involving Deutsche Motors, Our Technology, and Samboo Construction go beyond simple financial crimes, representing a classic case of structural market distortion and crimes entangled with power. These incidents share a common thread, with evidence indicating that accounts in the name of First Lady Kim Gun-hee and her family were repeatedly used, and that the same operational forces were organized and involved in multiple stocks, as revealed by special prosecutors and investigative agencies. In particular, in the Our Technology case, it was discovered that several hundred million won from the sale of Deutsche Motors stocks was deposited into an account under Kim Gun-hee's name and then used for purchasing Our Technology stocks. Similar trading patterns were also confirmed in an account under Choi Eun-soon’s name during the same period. Samboo Construction is similarly suspected of collusion between specific brokers and executives, with evidence suggesting repeated acts of artificially supporting stock prices followed by sales. As such, operational forces connected to both the political and business sectors have seriously undermined market order while the resulting harm has concentrated on numerous ordinary investors. This article aims to analyze the patterns and structure of investor damages arising from these stock manipulation incidents and explores how the overall trust in the capital market is collapsing.

Main subject: Investor damage structure centered around the Wooree Technology incident

Stock manipulation typically occurs through methods such as collusive trading, large-scale purchases, and the dissemination of false information. The orchestrating group focuses on accumulating shares of stocks with low liquidity and spreads favorable information through online communities or media to induce entry by general investors. Once the stock price rises to a certain level, they realize profits by selling their held shares at the peak and then exiting. In this process, the victims are mostly ordinary individual investors, commonly referred to as "ants." Particularly, investors who rely on technical analysis or react to short-term materials are easily targeted. Individual investors who enter during the abnormally rising stock price often bear losses after the orchestrating group exits, resulting in a sharp decline.

Our Technology Case: The Actual Scale and Path of Damage

In the Woori Technology case, this typical operational structure was clearly evident. From late 2010 to early 2011, Woori Technology's stock price rose abnormally with a sudden influx of buying. Accounts under the names of Kim Geon-hee and Choi Eun-soon were heavily traded during this period, and the spikes in trading volume perfectly matched the moments of stock price increases. General investors who entered the stock at the average price during that time faced significant losses starting from the market crash that began in mid-2011. The stock then remained within a trading range for several years, experiencing structural undervaluation as foreign and institutional demand dwindled. When the special investigation team designated Woori Technology as a stock manipulation suspect in 2025 and commenced investigations, the stock price plummeted once again, leading existing investors, who had not recovered from past losses, to suffer double losses. The structural damage caused by stock manipulation resulted not only in direct asset losses but also in opportunity costs and psychological fatigue, creating a continuous cycle of harm.

Emotional and Psychological Damage

Investor damage is not limited to financial losses. Repeated stock manipulation incidents reinforce the cynicism that 'retail investors always lose,' which dampens the overall psychology of the investor community. This leads to a avoidance of long-term investments and a focus on short-term trading, preventing a healthy investment culture from taking root. Individual investors become more reactive to rumors or thematic issues in the community rather than to IR materials or financial information of listed companies, making the market more speculative and triggering a vicious cycle. Ultimately, the damage from stock manipulation transcends individual losses and leads to collective distrust and behavioral distortions among market participants.

Impact of Stock Market Manipulation on the Overall Market

The impact of stock manipulation is not limited to individual stocks. If false information and abnormal trading persist for several months and the exchange system fails to filter it out, trust in the exchange itself collapses. Disclosures from listed companies or investor relations materials no longer serve as the basis for investment decisions, and market participants shift to a distorted ecosystem that reacts sensitively to 'forces' rather than materials. As a result, even performance-based companies fail to receive normal evaluations, undermining the fundamental trust underpinning the listing system.

Collapse of trust in the exchange system

When stock price manipulation occurs repeatedly, investors add a 'risk premium' to the entire market. This creates an effect of lowering the expected returns on equities as an asset class, which ultimately leads to a withdrawal and slowed influx of funds in the capital markets. In particular, small and mid-cap stocks are more likely to become targets of price manipulation, resulting in a lack of long-term investment influx and a repetitive influx of speculative funds, thereby solidifying the structural volatility and undervaluation of the stocks. This has a negative impact on the financing of small and medium-sized enterprises with growth potential.

Adverse effects on corporate IR and management strategy

In a market where stock price manipulation occurs repeatedly, corporate strategies are also affected. Some companies come to rely on material news or short-term themes rather than their actual performance, and even companies preparing to go public design their business structures to emphasize 'speculative expectations' rather than sustainable revenue models. This distorts the very criteria by which the market evaluates companies and leads to the emergence of a corporate management culture that prioritizes short-term price boosts over long-term growth.

Review of the Effectiveness of Surveillance Functions: Responsibilities of Financial Authorities and Exchanges

The financial authorities and the Korea Exchange have the technical capabilities to detect abnormal trading. In the cases of Deutsche Motors and Woori Technology, alerts for unusual trading did occur several times, and it has been confirmed that internal reports were made. However, the absence of a connection between these monitoring systems and actual investigations has structurally weakened the effectiveness of surveillance. The issue is not a lack of technology, but rather a deficiency in the administrative will and structural independence necessary to transition to investigations.

Conflict of interest and lack of independence of oversight bodies

Financial authorities and exchanges are simultaneously positioned as stakeholders in listed companies and regulators. This inherently involves a conflict of interest, making it difficult to actively issue early warnings. Additionally, internal whistleblower or alert systems lack effectiveness, and most punitive measures are limited to administrative actions, resulting in weak deterrence against market disruption activities. Within this structure, stock price manipulation is recurring, and the framework is solidifying where investors are unprotected.

Conclusion: The damage from stock manipulation is a matter of trust, not numbers.

The stock manipulation incidents lead to a more serious disruption of market order and collapse of trust than financial losses. As seen in the cases of Deutsche Motors, Woori Technology, and Samboo Engineering, the damage is not limited to a few investors it distorts the entire structure of the market and induces a long-term qualitative decline in the capital market. Investor protection is crucially about preemptive measures and the establishment of transparent monitoring systems rather than post-factum compensation or restitution. If the monitoring functions do not operate, the market can be repeatedly distorted by operational forces at any time. Failure of supervision is not incompetence but rather complicity and negligence. This reveals the reality that financial institutions, exchanges, and regulatory authorities are no longer neutral. For the Korean capital market to regain trust, institutional reforms designed from the investors' perspective and the actualization of independent monitoring bodies are essential.