March 18, 2011
On 17 March 2011, the National Police Agency apprehended a 28-year-old office worker, identified by his family name Byun, for the distribution of false information that could cause public anxiety. It is alleged that Byun was the primary source of a rumour that radioactive material from Fukushima, Japan, would reach Korea, which after spreading rapidly via internet and social network services, resulted in a 2.4 percent fall in the KOSPI. Authorities did not find evidence of an intention to affect financial markets, inflict harm or obtain profit. The case demonstrates two important factors. Firstly, financial markets are currently highly vulnerable. If there is indeed, a direct link between Byun’s actions and the 2.4 percent fall in the KOSPI, this demonstrates that a rumour; which in normal circumstances would seem an innocuous, albeit tasteless office prank; can shake confidence in the market. This demonstrates that financial markets are in a highly vulnerable and uncertain state. Secondly, government communication strategies are less than effective. In recent months, governments across the globe have been caught unaware of the speed with which both positive and negative information spreads via smart-phones and social network services. The current case, while not as serious as examples overseas, will encourage a government rethink of communication and domestic security monitoring strategies to avoid similar or more serious occurrences.
Tags: Ahn Hyoung-hwan, analytical consultancy, executive briefing, financial markets, Fukushima, GNP, government communication strategy, Japan, KOSPI, Lee Myung-Bak, nuclear, political risk, radioactive material, social network services