Lone Star, KEB Indicted In Stock Manipulation Probe

Law360, New York (November 20, 2006, 12:00 AM EST) -- Korea Exchange Bank and a branch of American hedge fund Lone Star Funds have been indicted by South Korean prosecutors for allegedly orchestrating a stock manipulation scheme that allowed the fund to acquire the bank for a below market price.

Korean Regulators claim that Lone Star executives and KEB’s credit card unit collaborated to understate the value of the bank in order to expedite the acquisition of the bank by Lone Star.

Korean law does not permit foreign-based entities to gain control of financially stable banks....
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