Fake financial consultancies rampant as KOSPI, Kosdaq rally

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Choi ji-sung, an office worker in his 40s, said he heard about some of his colleagues almost losing their savings overnight.

“They are not reckless people,” he said. “They genuinely believed they were receiving professional guidance. After hearing what happened to them, I immediately withdrew from several online investment groups.”

Choi said two of his acquaintances had been drawn into what they thought were private consulting chatrooms run by major brokerages.

They said the operators provided daily market commentary and trading tips while claiming to manage assets for high net worth retail investors or large institutional investors.

“At first, they said, they thought, ‘What was the harm in investing 300,000 won ($207)?’ Then they saw the returns coming close to 100 percent of the initial investment. Then they thought, ‘If the seed money is bigger, so would be the returns.’ That’s how they got lured in,” Choi explained.

His colleages put together 1 million won, but the responses from the “consultants” were not as quick as before, and said to wait.

Feeling something was not right, they attempted to withdraw their funds, only to have the chatrooms go silent, the supposed advisers nowhere to be found.

Another investor, surnamed Kim, 38, said he fell victim to a similar scheme.

“At the beginning, the returns were real — or at least they appeared to be,” Kim said. “They shared profit screenshots every day and kept emphasizing that the KOSPI rally was a once-in-a-decade opportunity that ordinary investors like me could not afford to miss. They were all making 50 percent, 80 percent easily in profit. I thought I was the only one missing out.”

After being encouraged to increase his investment from his initial 10 million won, Kim transferred more money. Within days, his account was frozen, and more than 20 million won disappeared.

These are among many retail investors who fell victim to financial frauds as Korea’s stock market surges to historic highs, with the benchmark KOSPI breaking 5,000 points and the tech-heavy Kosdaq surpassing the 1,000-point mark.

Regulators warn that the recent market performance has created ideal conditions for financial crime as scammers exploit investors’ fear of missing out and their willingness to take on greater risks.

According to the Financial Supervisory Service (FSS), fake financial consultancies and illegal stock-picking chatrooms have multiplied rapidly in recent months.

Scammers commonly impersonate employees working for widely known brokerages, using company logos, professional titles and fake credentials to establish credibility.

The approach people through social media platforms or messaging applications, and their victims are asked to join private group chats through online links.

These chatrooms then provide market analysis and investment recommendations, showing screenshots of profits that are difficult for retail investors to verify.

“Legitimate securities firms and licensed professionals do not solicit investments through unofficial chatrooms,” the FSS said.