Vivozon Pharmaceutical’s stock fell sharply on Thursday following news that former employees were referred for criminal prosecution over allegations of insider trading. Shares closed at 6,020 won ($4.36), down 4.8 percent from the previous day.

According to the Financial Services Commission’s Securities and Futures Commission (SFC), the misconduct involved former employees who misused non-public information related to a new drug development project between February and March 2023.

These individuals reportedly purchased shares in advance of favorable public disclosures or tipped off acquaintances, ultimately selling the stock following a price increase and earning illicit profits.

The SFC has filed formal complaints and notified the prosecution of the findings.

Vivozon Pharmaceutical on Thursday issued a statement, emphasizing that the alleged wrongdoing was limited to a “small number of former employees” and constituted “personal misconduct unrelated to senior management.”

The company added that the individuals involved had no decision-making authority and had already left the organization prior to the investigation.

“Although some media reports incorrectly described them as executives, they were not members of the management team,” the company said.

Vivozon Pharmaceutical said it will use this incident as a turning point to re-evaluate its internal security controls and organizational culture.

“We are committed to becoming a more transparent and trustworthy company,” the statement concluded.