A South Korean court on Wednesday sentenced the leader of a stock manipulation ring that drove up shares of cardboard maker Youngpoong Paper 14-fold to 15 years in prison and a fine of 397.3 billion won, in what the Chosun Ilbo reported was the largest stock rigging case involving a single listed company.

The Seoul Southern District Court’s 12th criminal division, presided over by Judge Park Jong-yeol, also ordered the ringleader, Lee Jin-hoon, to forfeit 132.427 billion won. It sentenced Gong Hyun-cheol, who funded the scheme after taking over the company, to three years in prison with a 243 billion won fine and a 7.47 billion won forfeiture order.

About 20 accomplices tried alongside them received sentences ranging from 18 months to six years in prison, suspended terms and deferred sentences, according to the Chosun Ilbo. Prosecutors indicted 24 people in the case between October 2023 and July 2024.

Youngpoong Paper’s stock rose from about 3,400 won in October 2022 to 48,400 won a year later despite no change in the small company’s business, then fell around 30 percent in value, inflicting losses on retail investors and on brokerages through unpaid margin trades, the newspaper reported.

Gong, who had operated in the mergers and acquisitions market since the 2010s, acquired Youngpoong Paper through Daeyang Metal with mostly borrowed money in what the report described as a classic no-capital takeover. To support the share price after the acquisition, he supplied funds to Lee, a former loan shark from Seoul’s Myeongdong district, whose group of about 20 members then planned the manipulation, the Chosun Ilbo reported.

The ring operated in three teams, dubbed the Myeongdong team and the Samseong-dong team among them, in a cell structure designed to evade investigators, the newspaper reported. Members outside the same team, apart from a few principals, did not know one another’s identities, and roles were divided between recruiting accounts and funds and executing trades.

From October 2022 to October 2023 the group used more than 440 securities accounts to place pre-arranged buy and sell orders and matched trades to lift the price, issuing some 230,000 rigging orders and reaping illicit gains prosecutors put at 789.8 billion won.

The court said Lee had played the central role in planning and leading the rigging and overseeing the accounts and funds, and that the ring’s crime had severely distorted the market by driving the price up 14-fold in a year. It found Gong had supplied significant funds and share volume over a long period for his own business purposes.

The court said the offence caused grave social harm by impeding the sound development of the capital market and required stern punishment to restore fair trading order and trust.

But the court recognized only 132.4 billion won of the 789.8 billion won in illegal gains cited in the indictment, ruling that additional material the Financial Supervisory Service collected without a warrant, after prosecutors opened their investigation, amounted to illegally obtained evidence. It also found fault with prosecutors seeking a warrant against the regulator rather than against the parties to the account transactions.

The case surpassed in scale for a single stock the manipulation scheme behind the April 2023 crash of SG Securities-linked shares, which involved eight listed companies over about four years and illicit gains of 730.5 billion won, according to the Chosun Ilbo. The Youngpoong ring took in about 790 billion won from one stock in 13 months, the investigation found.

Prosecutors had sought a 20-year term and a fine of 1.0947759 trillion won for Lee at a trial session in July, and a 20-year term, a 2.3694 trillion won fine and a 11.3 billion won forfeiture for Gong at a hearing on Sept. 9.