Value context and insight. lkm@koreatimes.co.kr
Revised law targets fraudulent online stock advisories
gettyimagesbank
By Lee Kyung-min
An office worker surnamed Lee received a text message about making “quick cash in less than a month.”
“I have some money in my stock account. I have incurred losses a bit after prices took a dive over the past few weeks. I was briefly tempted to click the link attached.”
She was close to calling or at least sending a message back to the sender, as the text was sent only a day after she lost 7 million won ($5,200).
“The message read that a law was revised in 2024 whereby losses of over 5 million won can be recovered legally. I would be lying if I said it didn't grab my attention, however briefly.”
Included in the text was a link which the sender said was the fastest way to check one's eligibility for the investor loss recovery program. It also said that shares certain to make at least 5 percent gains will be recommended every day, as well as ones that will rise to the intraday limit.
The message also said that joining a sector-specialist mentor-guided online community on Naver, the country’s largest portal, to study share price movements, will guarantee 80 percent gains, as evidenced by years of performance data.
This is not the first time she was contacted for what she knows is almost always a scam.
There were times, Lee added, when she received phone calls from people saying how they could make her a more successful investor with the help of market specialists.
They dropped the names of a few local brokerages everybody has heard of, and said only a select few will be given this rare chance.
“I knew it was a scam, and how most others would fall for it right away. People hear a lot on the news about phishing scams of this sort. But when it actually happens to them, some may think it would be different with them, which makes them become the next victim of organized financial crime rings.”
Cases like this will be less frequently heard of now that the National Assembly passed the revision of the law governing financial investment businesses during plenary session on Thursday. The Financial Services Commission said that the revision will take effect six months after promulgation.
Under the revision, making a suggestion that investment losses can be recovered or guarantees of profits will be punishable by up to three years in prison or a fine of up to 100 million won.
Individuals misrepresenting employees of established financial services firms with the intent to mislead investors, may face fines of up to 100 million won. Similar fines will be imposed for making misleading promises of high returns grounded on falsely asserted previous returns.
As a result, the prevalence of so-called "stock leading rooms," which are fake investment advisories often associated with online investment fraud, could decrease.
“The revision will strengthen investor protection, as underpinned by strict regulation and monitoring of and punishment for infractions,” the FSC said.