FSS: "Loss Compensation and Forged Documents Used to Deceive... Illegal Financial Investment Operators Flourishing"

[Asia Economy Reporter Lee Jung-yoon] As investment losses increase due to volatility caused by base rate hikes, illegal financial investment operators are running rampant, prompting the Financial Supervisory Service (FSS) to urge special caution.

On the 19th, the FSS announced that it had requested investigations into 36 cases with specific allegations and secured evidence collected through reports and complaints up to last month. This represents a 16.1% increase compared to the same period last year. The FSS also detected 456 illegal financial investment-related websites and posts, taking measures such as requesting the blocking of online posts.

A representative case involved operators encouraging investment in unlisted stocks via phone calls and social networking services (SNS), claiming to compensate investors for investment losses. They deceived investors by assuring guaranteed returns, stating that the stocks were scheduled for listing, and used phrases like "unconditional compensation possible" and "first-come, first-served loss compensation" to lure investors, emphasizing that the events were conducted to protect investors. Cases were also confirmed where they falsely informed investors that government agencies such as the FSS and the Fair Trade Commission had ordered loss compensation.

In such cases, additional damage is highly likely when dealing with illegal financial investment operators. The accounts designated by these illegal operators are often "dapo" (proxy) accounts, making actual damage relief difficult, and investigations take a long time, making it hard to recover losses through the confiscation of criminal proceeds. Therefore, it is necessary to verify in advance whether the counterparty is a regulated financial company by calling the official number and directly confirming the name and department of the person in charge.

There have also been cases where manipulated screenshots of the Korea Exchange website were provided via SNS to deceive the public into believing that unlisted companies were about to be listed, encouraging the purchase of unlisted stocks. Illegal acts that mislead investors by showing phrases such as "scheduled for listing in 2022," "Nasdaq listing in progress," unverified internet articles, and false IR materials were also detected.

If you receive such solicitations, you should verify the facts by calling the unlisted company's main phone number and confirming the relevant information through the person in charge or by directly checking the Korea Exchange's corporate disclosure website. Since unlisted stocks are traded in a limited manner over-the-counter, with liquidity constraints and insufficient information, decisions should be made cautiously.

Additionally, cases were detected where free stock investment consultations were offered via YouTube securities broadcasts, text messages, or messengers. They lure investors into group chat rooms, provide simple information such as market conditions, then use phrases like "support fund event" and "premium information provision" to guide them into separate one-on-one chat rooms and induce them to join paid memberships. They also mislead investors by showing fake certificates and manipulated investment performance or by claiming principal guarantees or compensation for losses.

Moreover, the FSS has caught operators who mislead investors by promising high short-term returns if they follow their leads, inducing the installation and use of private Home Trading Systems (HTS). These operators falsely display high profits on the private HTS screens to continuously encourage deposits and, when investors request withdrawals, they demand additional funds under the pretext of fees or taxes before disappearing.

The FSS advises that financial investment products such as stocks and derivatives inherently carry investment risks and the possibility of principal loss, so investors should not be deceived by false or exaggerated claims offering high returns or principal guarantees. They also warn against installing private HTS programs sent directly via text messages or emails and advise refraining from any transactions in such cases. Most accounts used to induce deposits are proxy accounts with different account holders and company names, so fund transfers should be avoided.

An FSS official stated, "If there are abnormal demands or suspicion of fraud during transactions, immediately stop the transaction and promptly report to the police or the FSS. Quick reporting and reporting are the only ways to prevent further crimes, and delays only give illegal operators time to conceal criminal proceeds."

He added, "We will promptly carry out related online blocking requests and investigation requests through reports, self-monitoring, and other means related to illegal financial investment operators, continuously provide guidance on precautions, and strengthen cooperation with related agencies to effectively crack down on illegal activities."

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