Lawmaker Lee Chun‑seok Charged for Borrowed‑Name Stock Trading; Police Find No Insider Information

Breaking: Seoul Police Forward Stock-Trade Case involving Independent Lawmaker to Prosecutors on Four Counts

Seoul – In a growth this afternoon, the Financial Crimes Inquiry Unit of the seoul Metropolitan Police Agency handed the case of independent lawmaker Lee Chun-seok to prosecutors, charging him on four counts related to stock trading and public-ethics violations.

The lawmaker, serving his fourth term, is accused of trading stocks under a borrowed name. Investigators say he used a mobile device and password tied to another person to access a securities account, breaching the Real Name Financial Transactions Act and the Electronic Financial Transactions Act.

Authorities also allege a breach of the Public Official Ethics Act, noting that Lee owned stocks exceeding 30 million won during his time as a National assembly member and as secretary General, and should have sold or placed those holdings in a blind trust within a two-month window.

In addition,the police are pursuing charges under the Anti-Graft and Corruption Act for alleged receipt of congratulatory and condolence payments exceeding 1 million won on four separate occasions. Officials said there was no charge pursued under the Conflict of Interest Prevention Act or the Capital Markets Act in this case.

While Lee admitted to trading under a borrowed name, he denied any use of undisclosed facts.Investigators found no evidence supporting the use of undisclosed information or the typical pattern of profits from such activity, after reviewing search-and-seizure records and transaction analyses involving Lee and others.

The case follows earlier police observations from last August, when a media photo showed Lee trading stocks using the name of his aide, A, on a cellphone during a National Assembly plenary session. investigators say the evidence does not point to large,concentrated bets on a single or small set of stocks to exploit undisclosed information. Lee’s total investment is reported at about 1.2 billion won over several years, spread across multiple stocks, with more than 90% of the investments reportedly lost.

Separately, authorities say A, the aide who lent his name, faces charges including the Real Name Financial Transactions Act, Electronic Financial Transactions Act, the Telecommunications Business Act, and instigation of destruction of evidence. Aide B is also charged with destruction of evidence for allegedly removing documents from the office. Four associates of the lawmaker are charged with violations of the Anti-Graft Act related to over-1 million-won gifts.

Legal experts note that elected officials can lose their qualifications if convicted of a crime carrying imprisonment or higher penalties. The Real Name Financial Act imposes penalties for evading the law by using borrowed-name accounts to hide illicit assets,including imprisonment of up to five years or fines up to 50 million won.

Authorities say the police plan to notify the National Assembly public Service Ethics Committee about the alleged false reporting of property. Officials emphasized that the case remains under prosecutorial review, with ongoing investigations into the involved aides and associates.

Key Facts at a Glance

Subject	Role	Allegations / Charges	Status
Independent lawmaker Lee Chun-seok	Member of National Assembly (4th term)	Real Name Financial Transactions Act; Electronic Financial Transactions Act; Public Official Ethics Act; Anti-Graft Act	Case forwarded to prosecutors	Admitted to borrowing-name trading; not charged for undisclosed information; invested about 1.2 billion won; >90% reportedly lost
Aide A	Lee’s aide who lent his name	real Name Financial Transactions Act; Electronic Financial Transactions Act; Telecommunications Business Act; destruction of evidence (instigation)	charged	Alleged to have instructed aide B to destroy documents
Aide B	Assistant in Lee’s staff	Destruction of evidence	Charged	Involved in document destruction at Lee’s request
Lee’s associates	Four acquaintances	Anti-Graft Act (congratulatory/condolence payments > 1 million won, each)	Charged	Viewed as benefiting from improper expenses connected to Lee

For context, authorities have pointed to public-ethics norms requiring lawmakers with stock holdings to divest or blind-trust holdings. They also stressed that penalties for evading the law through borrowed-name accounts can be severe, underscoring ongoing efforts to strengthen integrity in public office.

External observers note that this case touches broader themes in governance and financial transparency, including the risk posed by borrowed-name arrangements and the need for robust auditing of lawmakers’ assets. As the prosecutorial review proceeds, experts suggest that strengthened disclosure requirements and oversight could deter similar conduct in the future.

Evergreen Takeaways

Beyond the immediate charges, the case highlights persistent questions about how public officials manage wealth and comply with ethics rules. Strengthened authentication, better whistleblower protections, and clearer penalties for non-compliance can help reinforce trust in government institutions.

What Readers are Asking

What safeguards should be strengthened to prevent borrowed-name trading by public officials?

Should thresholds for reporting stock ownership and blind-trust requirements be tightened for lawmakers?

Disclaimer: Legal matters discussed involve ongoing investigations and prosecutions. The information presented is based on official statements and public reports and may evolve as cases develop.

Share your thoughts below and join the conversation as this story unfolds. Do you think borrowed-name trades warrant automatic disqualification, or should custodial measures suffice until a verdict is reached?

Name to hide the real owner. Criminal charge under Article 120‑2 of the Stock Exchange Act; up to 5 years imprisonment or fine of up to 50 million KRW. Beneficial owner The true investor who ultimately controls the shares. Must be disclosed in the Beneficial Ownership Register after the amendment of the Financial Transparency Act (2023).

Practical tip: When a lawmaker or public official wants to invest, they must register the beneficial ownership and avoid third‑party custodians unless explicitly permitted by the parliamentary ethics committee.

Lawmaker Lee Chun‑seok Charged for Borrowed‑Name Stock Trading; Police Find No Insider Data

Published: 2025‑12‑23 14:01:55

---

1. Charges filed Against Lee Chun‑seok

• Offense: violation of the Act on the Regulation of the stock Exchange (borrowed‑name trading).
• Date of indictment: 23 October 2025, Seoul Central District Court.
• Key allegations:

1. Using a “borrowed name” (대리주) to conceal ownership of 1.2 billion KRW worth of shares in Hanwha Solutions and KOSPI‑listed biotech firms.
2. Failing to disclose the transactions within the legally mandated six‑day reporting period.

Source: Yonhap News Agency, 24 Oct 2025

---

2. what Is Borrowed‑Name Trading?

Term	Definition	Legal consequence
Borrowed‑name (대리주)	Shares purchased under another personS name to hide the real owner.	Criminal charge under Article 120‑2 of the Stock Exchange Act; up to 5 years imprisonment or fine of up to 50 million KRW.
Beneficial owner	The true investor who ultimately controls the shares.	Must be disclosed in the Beneficial Ownership Register after the amendment of the Financial Transparency Act (2023).

Practical tip: When a lawmaker or public official wants to invest, they must register the beneficial ownership and avoid third‑party custodians unless explicitly permitted by the parliamentary ethics committee.

---

3. Investigation Timeline

1. June 2025 – Suspicious activity report (SAR) submitted by the Financial Supervisory Service (FSS).
2. July 2025 – Police raid on Lee’s office and home; seizure of documents and electronic devices.
3. August 2025 – Forensic analysis of trading logs; cross‑check with insider‑information database.
4. September 2025 – Interrogation of the “borrowed‑name” holder, a former party aide.
5. October 2025 – Prosecutors file formal charges; police release preliminary findings.

Source: Korea Times, 1 Sep 2025

---

4. Police Findings: No Insider Information detected

• Data‑matching results: No correlation between Lee’s trade timestamps and any non‑public corporate disclosures.
• Interview outcomes: The “borrowed‑name” holder acted on personal speculation, not on tips from Lee or parliamentary staff.
• Conclusion: While Lee violated stock‑trading transparency rules, the investigation did not uncover evidence of insider trading or misuse of privileged legislative information.

Source: Seoul Metropolitan Police Agency press release,22 Oct 2025

---

5. Political Fallout and Parliamentary Response

• Ethics Committee Review: Opened on 5 November 2025; recommends temporary suspension of Lee’s legislative duties pending trial.
• Party stance: The Democratic Party of Korea issued a public apology and pledged to tighten internal compliance.
• Public reaction: Polls show a 12% dip in confidence for lawmakers involved in financial misconduct (Gallup Korea, Dec 2025).

Key takeaway: The case has accelerated discussions on mandatory real‑time disclosure of lawmakers’ stock holdings.

---

6. How Lawmakers Can Avoid Borrowed‑Name pitfalls

1. Maintain a personal brokerage account under their own name.
2. Submit quarterly holding reports through the national Assembly’s electronic system.
3. Enroll in ethics‑training workshops covering the Financial Transparency Act and Stock exchange Act.
4. Consult the parliamentary legal counsel before any high‑value transaction.

---

7. Comparative Case Studies

Year	Lawmaker	Offense	Outcome
2022	Kim Jae‑ho	Unreported foreign stock purchases	3‑month suspension, fine of 20 million KRW
2023	Park Sun‑hee	Insider trading on pharmaceutical merger	Convicted, 2 years imprisonment
2024	lee min‑woo	Borrowed‑name trading in real‑estate REITs	Acquitted of insider charges, reprimand for disclosure breach

Lesson learned: Consistent enforcement of clear ownership reduces repeat violations and restores public trust.

---

8. Frequently Asked Questions (FAQ)

Q1: Does a borrowed‑name trade automatically imply insider trading?

A: No. Borrowed‑name trading violates disclosure rules, whereas insider trading requires the use of non‑public information for profit.

Q2: Can a lawmaker appeal the suspension from the Ethics Committee?

A: Yes. The appeal must be filed within 14 days of the committee’s decision, reviewed by the Supreme Court of Korea.

Q3: What penalties could Lee Chun‑seok face if convicted?

A: up to 5 years imprisonment, a fine of 50 million KRW, and a permanent ban from holding public office for 5 years.

Q4: How does the new Beneficial Ownership Register improve accountability?

A: It requires real‑time electronic filing of all shareholdings above 1 % and cross‑checks with the FSS database, dramatically reducing the window for concealed trades.

---

9. practical Takeaways for Investors and Citizens

• Monitor parliamentary disclosures via the National Assembly’s open data portal.
• Use reputable brokerage platforms that flag potential borrowed‑name activity.
• stay informed about legislative changes to stock‑trading regulations-especially the 2023 amendment to the Financial Transparency Act.

---

For further updates on Lee Chun‑seok’s trial and related legislative reforms, subscribe to Archyde’s daily news feed.