"Stock Sales Using Listing as Bait"…Leading Chat Rooms and Unlisted Stock Fraud Crime Group Arrested

A group of 45 individuals who deceived victims into believing that unlisted stocks would be listed in the future and embezzled 17.5 billion KRW have been handed over to the prosecution.

On the 26th, the Financial Crime Investigation Unit of the Metropolitan Investigation Division at the Seoul Metropolitan Police Agency announced that from October last year to March this year, they arrested 45 people including the ringleader Mr. A on charges of fraud and violations of the Capital Markets Act. Among them, 4 were detained, and 41 were sent to prosecution without detention.

In front of the Seoul Metropolitan Police Agency's Metropolitan Investigation Unit Financial Crime Investigation Team conducting a briefing on the arrest of a gang involved in unlisted stock investment leading room fraud at the Mapo-gu office in Seoul on the 26th, bundles of seized cash are placed. Photo by Jo Yongjun jun21@

The police judged this group as a criminal organization and additionally applied charges of organizing a criminal group to 42 members. The ringleader’s mother was also charged with concealing criminal proceeds.

This group formed an "investment leading room criminal organization" in November 2021 and established a phantom company named A for the purpose of unlisted stock investment fraud. Subsequently, they colluded with Mr. C, the corporate representative of an unlisted company B, which claimed to be a "high-performance electric motor specialized company," deceiving 548 victims into believing that the company would soon be listed and sold stocks until May of the following year.

Police investigations confirmed that company B had no records of actual business operations and was therefore unable to be listed. At that time, the price per share of B’s stock was 500 KRW, but some victims purchased it at 10,000 KRW per share, suffering significant losses.

Despite knowing these facts, the group published promotional articles in some media outlets to advertise company B. They also sent promotional text messages randomly to unspecified individuals to attract investors. In the investment leading rooms they operated, they spread false information urging victims to buy specific stocks. The group disappeared in June 2022, when the listing was promised.

When reports of damage began to be received nationwide around June 2022, the Seoul Metropolitan Police Agency designated the Financial Crime Investigation Unit as the focused investigation office and sequentially arrested the suspects. They also seized 4.1 billion KRW in cash hidden by the members in private vault companies, luxury watches worth 900 million KRW, and confiscated 72 million KRW as a deposit for leasing high-end imported vehicles. It was found that the criminal proceeds were used for entertainment expenses, luxury purchases, and living costs.

A police official stated, "Recently, investment fraud in leading rooms that deceive ordinary people by promising high returns is rampant, disrupting the order of the capital market," and warned, "If the investment advisory firm is not certified or uses phrases that mislead investors such as short-term high returns, one should be cautious and question whether it is a legitimate investment contract."

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