Industry watchers are looking for answers why shares of Nature Cell have been surging lately despite the financial regulator’s issuing of “investment-alert warning” on Monday.

Nature Cell’s stock price had plunged below 5,000 won last month after CEO Ra Jeong-chan was indicted on charges of manipulating the stock price. However, the shares rebounded to 17,150 won ($15.3) per share as of 11 a.m. on Friday.

n Wednesday, foreign investors and institutional investors net-sold 165,000 shares and 18,000 shares respectively. However, individual investors net-purchased 194,000 shares on the same day.

Some rumors are circulating among small investors that Ra might be acquitted. Such anticipation might have affected the recent surge of Nature Cell shares, sources said.

Nature Cell officials said they did not have any knowledge related to the results of the trial on their CEO.

Earlier, prosecutors said Ra sent out press releases to media companies about a clinically unverified candidate substance and published a false article on the Nature Cell-affiliated online news outlet that the clinical trial was successful. By doing so, Ra allegedly earned 20 billion won worth of illegal profits, the prosecutors said.

“We have not heard any story that Ra would be acquitted. We have not heard of any trial result yet,” an official at Nature Cell said.

If a stock moves upward abnormally in a short amount of time, the Korea Exchange issues an investment alert warning on the stock to alert investors of possibly speculative trading and to prevent illegal transactions in advance.

If investors are to trade any stock designated as investment alert item, they should collect 100 percent margin when they entrust trading orders on the stock. Investors cannot provide a lending facility for the stock with the investment alert designation, either. Besides, the stock having the investment alert warning cannot be used for substitution securities.

Additional excessive price surges of Nature Cell stocks might prompt the regulator to suspend bid orders and issue an investment risk warning.