Law Firm Staff Steal Client Info & Face Penalties | Email Hack

A former IT employee at a major South Korean law firm and an employee at a private equity firm have received prison sentences and hefty fines for illegally accessing attorney emails to obtain confidential information for insider trading, a Seoul court ruled this week.

Ga Mo, the former employee of the law firm, was sentenced to three years and six months in prison and a fine of 6 billion won (approximately $4.6 million USD), although Nam Mo received a three-year prison sentence and a fine of 1.6 billion won (approximately $1.2 million USD). Both were also ordered to forfeit illicit gains totaling 1.82 billion won and 520 million won, respectively, according to court filings reported by multiple Korean news outlets.

The Seoul Southern District Court found that Ga and Nam, working between August 2022 and June 2024, systematically accessed the email accounts of lawyers in the firm’s corporate advisory team. They exploited this access to obtain non-public information regarding planned corporate actions, including tender offers and capital increases and then used that information to profit from stock trading.

The illicit gains from the scheme amounted to 1.8 billion won and 500 million won for Ga and Nam, respectively. The court criticized the defendants for utilizing family accounts and taking out substantial loans to conceal their activities. Investigators also found that the pair attempted to liquidate assets, including luxury vehicles and apartments, and convert them to cash after authorities began investigating, in an effort to avoid forfeiture.

Three additional individuals, including Ko Mo, an employee of MBK Partners’ investment advisory firm Special Situations (SS), received suspended sentences and fines. Ko and the others were convicted of using confidential information gleaned from meetings about stock buybacks and investment materials. They were ordered to forfeit between 110 million won and 220 million won each.

The case highlights the vulnerability of sensitive corporate information within large law firms and the potential for abuse by employees with privileged access. The court’s decision underscores the severity with which South Korean authorities are treating insider trading offenses.