[Exclusive] SG Incident Damage Spreads Nationwide... Recruiter in Chungbuk Collects 'Deposit' for Personal Gain [La Deokyeon Gate]

After Gyeongbuk, Chungbuk and Sejong... Nationwide Scale of Ra Deok-yeon's Crime
Recruiters Received 25% of Investment as Deposit
Deposit Personally Invested "Lost Everything"

It has been confirmed that investors in the Chungbuk and Sejong regions have also suffered damages from the group led by CEO Ra Deok-yeon of Hoan, the main culprit behind the Soci?t? G?n?rale (SG) Securities order-driven stock price crash incident. Additionally, it has been found that employees of corporations related to CEO Ra collected separate funds from investors under the pretext of deposits and did not return them after the 'Ra Deok-yeon Gate' broke out. There are also suspicious circumstances suggesting that they managed the deposits through their personal accounts.

According to a comprehensive report by Asia Economy on the 13th, investment damages from the 'SG Securities-driven stock price crash incident' have occurred in the Chungbuk and Sejong regions as well. These areas fall outside the previously investigated regions by the prosecution, which included Seoul, the metropolitan area, Daegu, Ulsan, Gwangju, and Jeju.

Among investors in Chungbuk and Sejong, it was confirmed that some paid separate money to recruiters as deposits in addition to the investment amounts placed in securities accounts managed by Ra Deok-yeon's group. Investors in the Chungbuk and Sejong areas invested through Mr. A, a team leader-level employee of Hoan FG, a management consulting firm led by Ra's close associate, Byeon Mo. Of the total invested amount, one-quarter was deposited into an account under Mr. A's name as a deposit.

Investor B from Chungbuk, who invested through Mr. A, also separately deposited 100 million KRW out of a total investment of 400 million KRW into Mr. A's personal account as a deposit. Mr. A explained that "when profits enter the investor's account, 50% of that must be paid to the company as a commission, so the deposit is held as collateral in case the investor does not pay the commission."

The way Mr. A requested personal information from investors and settled profits was identical to the methods used by Ra Deok-yeon's group. Furthermore, the stocks Mr. A explained to investors matched those involved in the 'SG Securities-driven crash incident.'

As with cases in other regions, investors through Mr. A did not receive clear explanations about how their investment funds were managed, other than being told "the company handles it." However, Mr. A promised to pay 1% interest monthly on the deposits. In fact, investor B received monthly transfers of 1% of the deposit amount into their account through Mr. A's account.

However, after the Ra Deok-yeon incident broke out, investors in Chungbuk and Sejong, including B, were unable to recover both their principal and deposits. When some investors demanded the return of their deposits from Mr. A, he responded that he had to manage the deposits through his own account and ended up incurring debts himself. This suggests that the recruiter Mr. A collected deposits from investors but used them as if they were his own money, investing them in Ra Deok-yeon's stock manipulation scheme to generate profits and embezzle funds.

Investor B is not the only one who lost money paid as deposits to recruiters and employees. In the Daegu and Gyeongbuk regions, where an investor committed suicide earlier last month, recruiter Kim also collected money from investors as deposits and did not return them after the incident. However, unlike Mr. A in Chungbuk, Kim did not clearly explain the deposits or provide any interest payments.

Experts point out that collecting deposits from investors in this manner and failing to return them constitutes a legal problem. Yang Tae-jung, chief attorney at Law Firm Gwangya, said, "If the purpose of the deposit was not truthfully explained when received, or if the basis for the 1% interest income was not disclosed, it constitutes fraud. If deposits were collected from an unspecified number of people and invested, it could also be subject to liability under the Act on the Regulation of Conducting Fund-Raising Business Without Permission (similar to unauthorized fundraising)." He added, "Since the deposits were not simply held but illegally invested, there is also a possibility of violating the Capital Markets Act (illegal discretionary trading)."

A Seoul Southern District Prosecutor's Office official investigating the 'SG Securities-driven stock price crash incident' said in response to questions about whether the investigation would be nationwide and whether investment amounts under the deposit name were being treated as criminal proceeds, "We are investigating the scale and structure of the crime and will verify whether the conditions of profits from criminal acts are met."

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