Value context and insight. lkm@koreatimes.co.kr
Fraudulent online stock advice rampant
gettyimagesbank
By Lee Kyung-min
An office worker surnamed Kim receives dozens of text messages suggesting he could make “a handsome profit in less than a month.”
He has been tempted to learn more, since shares he bought have been stagnant for months.
“The message said I would certainly be able to make quick money, as guided by market information and analysis from seasoned experts. I thought to myself — is this why I couldn’t make money? Because I didn’t have advice from experts?”
When he clicked on one of the links the sender said only paying members would be given access to valuable market information. The membership tiers varied and so would the potential profits, he recalled the sender saying.
“The sender said I should pay a membership fee of at least 300,000 won ($218) per month, adding that annual membership will lead me to far greater profit in the long term.”
He signed up for the monthly deal, and the sender showed captured images of days of stock chart movements that made an intraday surge for three days straight.
“They said any money I put down will jump 50 percent and up to 100 percent and over. All I needed was to wire the money and have the profit wired back in weeks.”
His initial investment was 3 million won, but he doubled the amount after the previous 3 million won netted him 40 percent profit.
“I ended up investing 6 million won, and a couple of hundred thousand won in fees here and there. I didn’t think it was a waste of money because I was making money in real time.”
However, his blind optimism and trust evaporated after shares bought took a dive.
“The sender didn’t respond to my texts or calls," he said. "I had to go to the police.”
Cases like this will be less frequent once a revision of the law governing financial investment businesses will take effect in August.
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 fines of up to 100 million won.
Those impersonating 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 promises of high returns.
Data from the Korea Consumer Agency and the Financial Supervisory Service showed the number of complaints filed over false online financial advisories came to 18,276 last year, up 2.5-fold from 7,625 in 2018.
Investments made with the false advisories stood at 8.3 million won per person in April 2023, double the 4.08 million won in 2019.