"Beware of IPO Subscription Fraud Impersonating Companies"…FSS Issues Consumer Alert

Financial Supervisory Service, Yeouido, Seoul. Photo by Jinhyung Kang aymsdream@

On the 20th, the Financial Supervisory Service (FSS) announced a consumer alert after cases were reported where scammers impersonated companies undergoing initial public offerings (IPO) to solicit pre-subscription at discounted offering prices, requesting personal information and payments.

According to the FSS, recently, cases were detected where websites mimicking the official websites of companies undergoing IPOs encouraged pre-subscription at offering prices lower than the actual ones. They sent website addresses via text messages that were easily mistaken for the company’s official site, pretending to conduct pre-offerings directly by the company to solicit investments.

In relation to Hyundai Hims, which submitted a securities registration statement in August and is scheduled to conduct subscription through Mirae Asset Securities from January 17 to 18 next year, a website similar to the company’s official site was created to solicit subscriptions at prices discounted from the offering price before the main subscription, inducing the entry of names and phone numbers.

Hyundai Hims reported these incidents to the Cyber Investigation Unit, the FSS, and the Korea Internet & Security Agency, and urged investors to be cautious through a “Pre-Offering Application Fraud Warning” notice on its official website.

The FSS emphasized, “All matters related to IPO subscription are conducted according to the procedures and methods stated in the securities registration statement, so please be sure to check the securities registration statement disclosed on the electronic disclosure system.” It added, “IPO subscriptions are conducted through underwriters during the subscription period stated in the securities registration statement, and there is no pre-subscription or individual subscription conducted by the issuing company before the subscription date.”

Furthermore, the FSS stated, “Do not respond to investment solicitations via phone calls or text messages,” adding, “Soliciting investments in existing shares without disclosure such as a securities registration statement is illegal.”