'Stock Proxy Trading Allegation' Lee Chun-seok Resigns from Party Overnight… Also Steps Down as Chair of the Legislation and Judiciary Committee

Lee Chun-seok, a member of the Democratic Party, announced his sudden resignation from the party on the night of the 5th in relation to the burgeoning 'stock proxy trading allegation' and also stepped down from his position as the Chair of the National Assembly's Legislation and Judiciary Committee.

This action came about six hours after Jeong Cheong-rae, the new leader of the Democratic Party, immediately directed an investigation into the matter. The police have also begun an investigation related to this member.

Jeong Cheong-rae: "The truth must be revealed through a police investigation"

Kwon Hyang-yeop, the spokesperson for the Democratic Party, stated in a text message sent to reporters that "the member called Leader Jeong around 8 PM to convey his intention to voluntarily resign from the party, saying he was sorry for causing trouble to the party." He further mentioned that "Leader Jeong stated that if the member voluntarily resigns, it would be difficult for the party to conduct an investigation and impose sanctions, and that the allegations should be clarified through a thorough police investigation."

The controversy arose the day before when the member was caught on camera trading stocks during a plenary session. The problem is that the stock account was not in the member's name but in the name of a staff member. The screen showed trades in companies like Naver and LG CNS, with an estimated investment amount exceeding 100 million won.

The member explained on Facebook, "There is no excuse for opening a stock screen during the plenary session," while asserting, "I have never opened an account in someone else's name for proxy trading. I will faithfully cooperate with the investigation." He also provided the excuse that he mistakenly took the staff member's mobile phone into the chamber.

However, when meeting reporters at the National Assembly that day, the member only replied, "It will be revealed later during the investigation," when asked about the reason for using the staff member's phone, and he said, "I don't know well" regarding being caught viewing stocks on a staff member's account in October of the previous year.

Did he buy stocks of beneficiaries in advance… Police begin investigation for violation of the Financial Real Name Act

The fact that the stocks were traded just before being designated as representative companies for the government's artificial intelligence (AI) has further fueled the controversy. Kwon Kyoo-taek, the senior spokesperson for the People Power Party, raised the possibility of information misuse, stating, "The stocks traded by this member were selected as representative companies for AI just before the government announcement."

The financial crime investigation unit of the Seoul Metropolitan Police Agency has placed the member and his staff member A under investigation for violations of the Financial Real Name Act. Consequently, the member stated, "I can no longer impose a burden on the party and its leadership," indicating his intention to resign and step down from the chair of the Legislation and Judiciary Committee.

In a post on Facebook, he apologized to everyone who felt anger and discomfort due to him that day, stating, "It is entirely my fault with no room for excuses. I will bear all criticism and blame."

The Democratic Party bows its head… The People Power Party plans to refer him to the Ethics Committee and file criminal charges

This incident has further narrowed the position of the Democratic Party as personal investors continue to express backlash over the recently announced tax reforms concerning capital gains tax on stock transfers, combined with allegations of proxy trading involving a party heavyweight. This situation splashes cold water on reforms the government is pushing, which announced the 'KOSPI 5000' era along with amendments to the Commercial Act.

Spokesperson Kwon stated, "Leader Jeong expressed his intention to establish strong preventive measures to ensure that such an incident does not happen again."

Meanwhile, the People Power Party announced that it would refer this member to the National Assembly's Ethics Committee and file a criminal complaint. Song Eon-seok, the floor leader and emergency response committee chair, heightened the offensive, stating, "This member did not list his stock holdings in the asset declaration submitted earlier this year."

Image source: Lee Chun-seok / News1, photo provided by The Fact, News1.