South Korea’s financial regulator recently exercised its search and confiscation right for the first time in an alleged stock-rigging case, since it was given the authority in 2002 under the revised law on securities trading.

Inspectors from the Financial Services Commission raided the residence of a certified public accountant working for a major accounting firm on June 1, a regulatory official said Tuesday.

The alleged scammer is suspected of engaging in unfair stock trading with colleagues by exploiting a corporate client’s insider information.

The official said it was feared that the accountant would destroy evidence, adding that the regulator “has almost completed the review of records on the confiscated cell phone and computer hard disks.”

FSC senior officials are reportedly fine-tuning their internal opinion on whether to file a complaint with the prosecution.

The regulator plans to actively use the compulsory investigation right for future cases in a bid to secure evidence as soon as possible, the official noted.

Through requests to the prosecution, the FSC is entitled to carry out the investigation when a court issues a warrant for search and confiscation.

This system is modeled on the fraudulent stock trading-related investigative authority of the U.S. Securities and Exchange Commission and the U.K. Financial Conduct Authority.

Two years ago, the regulator launched a joint investigative division for streamlined scrutiny of alleged manipulation cases. It is composed of a group of inspectors from the FSC, the Financial Supervisory Service, the Korea Exchange and the Ministry of Justice.

They are empowered to check mobile communication or Internet usage records and prohibit suspects from leaving the country.

By Kim Yon-se (kys@heraldcorp.com)