Lone Star guilty of stock manipulation

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, who had sought 10 years in prison for Yoo, also said they would appeal. Kim Kyung-soo, their spokesman called the five-year sentence "too light for the crime."

The fund blasted the decision and said it would appeal.

"Lone Star maintains that there is simply no credible evidence to support the court's findings," it said in a statement. "Lone Star will appeal this decision and is confident that it will be reversed."

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