Lone Star found guilty

A South Korean court ruled Friday that U.S. private equity group Lone Star Funds and the head of its South Korean unit were guilty of stock price manipulation.

The Seoul Central District Court found the fund and Paul Yoo, its country head, manipulated the stock price of the credit card unit of Korea Exchange Bank, in which the fund owns a controlling stake, said court spokesman Lee Dong-keun.

Lone Star and Yoo, who was sentenced to five years in prison by the court, were accused of conspiring to lower the price of KEB's credit card unit in 2003 by spreading false information.

Prosecutors had sought 10 years in prison for Yoo.

Dallas, Texas-based Lone Star has come under intense scrutiny in South Korea over its business activities amid local unease over the role of foreign investors in the economy.

http://edition.cnn.com/2008/BUSINESS/02/01/lone.star.ap/index.html