Annual 300% Returns Lured in Open KakaoTalk Rooms... "Beware of Groups Disguised as Financial Investment Businesses"

Sharp Increase in Reports of Stock Leading Rooms This Year
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[Asia Economy Reporter Minji Lee] #. Mr. A, who learned about an SNS group chat profit planner through internet advertisements, deposited about 40 million KRW into an account provided by this company and downloaded an HTS (Home Trading System) created by the operator to trade overseas futures. However, after incurring a loss of 10 million KRW from buying and selling, Mr. A demanded the principal repayment from the operator, but currently, not only is access to the HTS blocked, but contact is also impossible.

[Image source=Yonhap News]

The Financial Supervisory Service (FSS) warned investors to be cautious as illegal companies disguised as financial investment firms are thriving amid abundant market liquidity. According to the FSS on the 28th, the number of reports related to financial investment businesses submitted through the FSS’s ‘Cyber Illegal Financial Activities Report’ reached 495 this year, a sharp increase compared to 139 cases last year and 119 cases in 2018. Furthermore, through its own monitoring this year, the FSS detected unauthorized financial investment operators’ websites and advertisements, requesting site blocking measures, resulting in a total of 1,105 blocks, averaging 92 per month.

Most of the reported companies were fraudulent groups disguised as financial investment firms, with unauthorized investment brokers accounting for the majority (97%) of illegal financial investment violations. They were found to have lured ordinary people with high-return bait through SNS group chats and embezzled investment funds.

The main types of illegal business activities include unauthorized investment brokerage and unsound quasi-investment advisory activities. Unauthorized investment brokers often impersonate legitimate financial companies, induce investors to download private HTS, demand deposit of investment funds, deceive investors by showing fictitious profits, and then delay refunds or disappear when withdrawal is requested.

The FSS stated, “Licensed financial companies do not distribute private HTS, but unauthorized investment brokers often provide guidance via SNS or text messages rather than phone calls,” adding, “Using private trading to avoid the basic deposit requirement of over 10 million KRW for futures and options investment within the regulated system can lead to greater damages.”

In the case of unsound quasi-investment advisory activities, investors are enticed by exaggerated profit advertisements, but most lack objective evidence and expertise, resulting in a high likelihood of losses. Moreover, when investors request refunds due to trading losses, excessive penalties are often demanded. The FSS emphasized, “If losses occur following the advice of quasi-investment advisors, it is difficult to seek compensation as investment responsibility lies with the investor.”

Accordingly, the FSS urged that companies guaranteeing high returns and recommending investments must be verified as licensed financial institutions, and if damages occur, reports should be made to the FSS or the police immediately. They especially advised not to be misled by advertisements such as ‘Overseas futures trading possible with a small margin deposit,’ ‘Commission-free,’ or ‘Loans up to 10 times the purchase amount.’ The FSS also noted, “Illegal financial investment operators often misuse the names of licensed companies like ‘00 Asset Management,’ so it is necessary to verify investment solicitations through the company’s official phone number,” and warned, “Special caution is required when investment solicitations demand transfers to specific accounts.”

This content was produced with the assistance of AI translation services.