[Exclusive] Massive Loss Leads Gyeongbuk Investor to Extreme Choice... Nationwide Scale Suspicion in 'Ra Deok-yeon Crime' [Ra Deok-yeon Gate]

On the 6th, a 44-year-old male investor found dead in Gyeongsan, Gyeongbuk
"There is a Daegu·Gyeongbuk ringleader who flaunted friendship with Ra Deok-yeon's younger sister"

An investor from the Gyeongbuk region, believed to be related to the 'SG Securities-triggered Stock Price Crash Incident,' was found to have taken an extreme step earlier this month. This is the first confirmed case of an investor who took their own life in connection with this incident. Notably, the recruiter who brought in this investor reportedly mentioned multiple times their close relationship with Ra Deok-yeon Hoan CEO's younger sister. Furthermore, since the investment took place in the Daegu-Gyeongbuk area, outside the Seoul metropolitan area where the prosecution's investigation is underway, there is speculation that Ra Deok-yeon’s group may have committed crimes on a nationwide scale.

According to the Gyeongsan Police Station in Gyeongbuk on the 31st, a 44-year-old man identified as Mr. A was found dead in a residential area of Gyeongsan City on the 6th. On the same day, after receiving a missing person report from his family and conducting a search, the police discovered Mr. A deceased at the home of Ms. Kim (female), who is suspected of recruiting investors in the Daegu-Gyeongbuk area.

Based on Asia Economy’s comprehensive reporting, Mr. A appears to have participated as an investor through Ms. Kim, whom he knew personally, and who was connected to CEO Ra’s side. It is reported that Mr. A suffered severe psychological and financial damage following the 'SG Securities-triggered stock price crash.'

Mr. A, who ran a small business in Gyeongsan, heard from his acquaintance Ms. Kim that she was making significant profits through organized stock investments. At the end of December last year, he opened an account under his family’s name and provided it to Ms. Kim, investing 30 million KRW of his own funds along with a total of 220 million KRW from family and acquaintances. Additionally, just before the 'SG Securities-triggered stock price crash' in March, he invested an additional 100 million KRW through an account in his own name.

In January this year, Mr. A earned a profit of 120 million KRW beyond his principal investment. He paid 60 million KRW, which is 50% of this profit, as a commission to the investment operators through Ms. Kim, and separately paid Ms. Kim a 6 million KRW commission. The remaining 54 million KRW profit was shared among the invested family and acquaintances.

However, by the end of April this year, when the 'SG Securities-triggered stock price crash' occurred, Mr. A lost his entire principal in an instant and even incurred debt. Despite offsetting the previously earned profits, he suffered a significant loss. His first account showed a negative balance of 115 million KRW, and the second account showed a negative 95 million KRW. Not only Mr. A but also his invested family and acquaintances lost a total of 320 million KRW and incurred debts exceeding 200 million KRW. For most of these small business owners, such losses were financially unbearable.

Meanwhile, an acquaintance of Mr. A said that Ms. Kim tried to reassure investors by mentioning CEO Ra’s younger sister. One investor said, "From the beginning of receiving investments, Ms. Kim repeatedly mentioned her relationship with Ra CEO’s younger sister, Ra OO." It is also known that Ms. Kim and Ra OO played golf together. Ms. Kim reportedly posted photos with Ra OO on social media and showed them to investors. According to Asia Economy’s investigation, Ra Deok-yeon is known in the legal community to have a younger sister named Ra OO. However, it has not been confirmed through prosecution investigations whether the younger sister was involved in Ra Deok-yeon’s stock manipulation.

Meanwhile, Ms. Kim hinted at the existence of an investment organization by telling investors like Mr. A that "training is being conducted in Incheon." One investor said, "I heard that Ms. Kim frequently receives training at the 'headquarters' located in Incheon."

If the behavior of Ms. Kim as reported by investors is true, it is presumed that Ra Deok-yeon orchestrated a nationwide stock manipulation investment scheme by mobilizing even his younger sister, appointing recruiters by city and province, and conducting organized training.

The way Ms. Kim requested personal information from investors and settled profits is identical to the methods used by Ra Deok-yeon’s group. Ms. Kim required identification cards, bank accounts under the investor’s name, and mobile phone SIM cards to open securities accounts and activate mobile phones under the investors’ names. This matches Ra Deok-yeon’s group’s practice of investing using mobile phones registered under investors’ names.

The stocks Ms. Kim explained to investors for purchase included Dow Data, Seongwang, Seoul City Gas, and Samchully, which correspond to the stocks involved in the ‘SG Securities-triggered crash incident.’ When investments yielded profits before the stock price crash, 50% of the profits were received in cash from investors as investment commissions. Ra CEO’s group also used the same method, taking 50% of profits as investment commissions from investors.

The investment method and profit settlement method were also similar to those of Ra Deok-yeon’s group. Ms. Kim instructed investors to transfer their invested funds from their personal bank accounts to securities accounts under her name. This was to avoid detection by financial authorities and make the investments appear legitimate. She also collected deposits in cash from investors.

However, when reports of ‘mobile phone collusive trading’ surfaced at the end of last month, coinciding with the sharp stock price drop in the ‘SG Securities-triggered crash,’ Ms. Kim appears to have attempted to manage the aftermath by returning or destroying the mobile phones she had collected from investors. One investor said, "As soon as the Ra Deok-yeon incident broke out, Ms. Kim returned the mobile phones."

The group that received and operated the investment funds from Mr. A and others through Ms. Kim purchased stocks exceeding the amount of the invested funds without informing the investors. Because of this, investors suffered losses exceeding their principal due to the ‘SG-triggered stock price crash.’ The Contract for Difference (CFD) used by Ra CEO’s group requires high standards such as a minimum balance of 50 million KRW in financial investment products, an annual income of 100 million KRW (150 million KRW combined for couples), net assets of 500 million KRW, or at least one year of experience as a lawyer or CPA in the relevant field. If these criteria were not met, stock margin trading and other methods were used. Mr. A, an ordinary citizen, invested through stock margin trading, which led to losses greater than his principal. It appears that Mr. A could not bear these losses and took an extreme step.

The Seoul Southern District Prosecutors’ Office, which is conducting a detention investigation of Ra Deok-yeon’s group, has stated that it will broadly review matters related to Ms. Kim. A representative of the Southern District Prosecutors’ Office said, "We cannot disclose specific investigation details."

Asia Economy attempted to contact Ms. Kim several times by phone to hear her explanation, but she refused to answer calls.

※ The recent SG Securities-triggered stock price crash has sounded an alarm for the capital market order. Readers’ tips will be a great help in uncovering the truth. We welcome any reports regarding investment damage cases, suspicions of stock manipulation and asset concealment by Ra Deok-yeon’s group, insider details about the large-scale sales by major shareholders of Dow Data and Seoul Gas, or any other related information (jebo1@asiae.co.kr). Asia Economy will do its best to establish a transparent capital market order.