The Financial Services Commission (FSC) has referred Won-jun Jang, former CEO of Shinpoong Pharmaceutical, and its holding company, Songam Corporation, to prosecutors on insider trading charges related to the malaria drug Pyramax, which was under review as a COVID-19 treatment.

On February 12, the Securities and Futures Commission (SFC), a division of the FSC, held its third regular meeting and decided to file a criminal complaint against Jang and Songam Corporation for violating the Capital Markets Act’s prohibition on using undisclosed material information. Songam Corporation is the holding company controlled by Jang and his family.

The SFC found that Jang was aware of unfavorable Phase 2 clinical trial results for the COVID-19 treatment before they were publicly disclosed. Using this knowledge, he sold a significant volume of Shinpoong Pharmaceutical shares, avoiding losses of approximately $25.6 million.

Shinpoong Pharmaceutical had conducted clinical trials in South Korea but failed to meet efficacy targets. Before this information was made public, Jang arranged for Songam Corporation to sell 2 million shares—3.63% of its stake—in a block deal in April 2021 at $58.21 per share. The transaction was disclosed before market hours on April 27, 2021, after which Shinpoong Pharmaceutical’s stock price fell by 14%.

Jang was both the CEO of Shinpoong Pharmaceutical and the representative director of Songam Corporation at the time.

An SFC official stated, “As the de facto owner of a KOSPI-listed company, Jang should have upheld market integrity. Instead, he misused non-public information for personal gain, a serious violation warranting legal action.”