'Zero Tolerance for Illegal Reading Rooms'... FSC and National Police Agency Collaborate on 61 Investigations

Undercover Inspections Reach 700 Sessions Including Theme Stock Rumor Spreading
National Police Agency Launches Investigation into All 61 Related Individuals

Financial Supervisory Service building in Yeouido, Seoul. Photo by Heo Younghan younghan@

The Financial Supervisory Service (FSS) and the National Police Agency's National Investigation Headquarters have been conducting special crackdowns and investigations on illegal leading chat rooms since signing the 'Capital Market Illegal Activities Response Memorandum of Understanding' in August last year.

On the 3rd, the FSS announced that it had conducted special crackdowns over the past six months on cases suspected of illegal activities, including unregistered investment advisory (48 cases), fraud (7 cases), and unregistered discretionary investment management (2 cases), and referred a total of 61 cases to the police for investigation.

In June last year, the FSS established an 'Illegal Leading Room Crackdown Team' and conducted two surprise inspections on investment advisors and discretionary managers whose victims were widespread or who caused social disturbances.

In particular, more than 700 focused inspections were conducted online on platforms such as cafes and YouTube to check for illegal activities, including the spreading of baseless rumors about theme stocks. Among these, cases with multiple victims had their damage data collected and were referred to the police for investigation, continuously collaborating with investigative agencies.

The National Investigation Headquarters has started investigating all 61 cases referred by the FSS. Since signing the 'Capital Market Illegal Activities Response Memorandum of Understanding' with the FSS last year, the National Investigation Headquarters has designated four types of offenses as special crackdown targets: △false information fraud △investment fund embezzlement △unfair trading △illegal business activities.

The FSS and the National Investigation Headquarters plan to strengthen publicity to prevent illegal leading room damages in the future. They will jointly produce and distribute promotional videos and posters featuring 'Shuka', 'SamproTV', and others.

Additionally, the Financial Supervisory Service plans to provide training programs related to stock market unfair trading and accounting crimes at the FSS Training Institute and police stations nationwide for police investigators.

The FSS and the National Investigation Headquarters plan to closely monitor and crack down to prevent theme stocks riding on the general election and government policies from spreading through leading rooms. An FSS official stated, "We will conduct regular undercover inspections focusing on leading rooms through keyword searches such as low PBR and 'corporate value-up programs,' as well as theme stocks and rapidly rising stocks related to the general election," adding, "If there is suspicion of unfair trading such as fabrication and distribution of false information or market manipulation, we will promptly investigate and take strict measures."