"Guaranteed 200~300% Returns"... Gang Making 5.5 Billion KRW by Selling Unlisted Stocks

46 Arrested, 5 Detained... Impersonating Experts and Spreading False Information

A group that embezzled about 5.5 billion KRW by selling unlisted stocks with no possibility of listing was arrested by the police.

On the 22nd, the Seoul Metropolitan Police Agency's Criminal Mobile Unit announced that they had arrested 46 people, including CEO A of the stock issuing company, on charges of fraud under the Act on the Aggravated Punishment of Specific Economic Crimes, violation of the Capital Markets Act, and organization of a criminal group. Among them, five people including A, the head of the sales team, and stock brokers were detained.

Seized items photo [Photo by Seoul Metropolitan Police Agency]

They are accused of selling unlisted stocks through telemarketing from September last year to April this year at prices 30 to 300 times the face value of 100 KRW, embezzling about 5.5 billion KRW from a total of 286 victims.

A was introduced to an unregistered telemarketing sales team through a stock broker while experiencing management difficulties in September last year, and conspired to distribute profits by circulating his company's stocks. The sales teams sent messages in stock discussion rooms on portal sites and online stock communities or lured victims into social networking service (SNS) leading chat rooms, claiming "The company is scheduled to be listed on KONEX in the first quarter of 2024, and a 200-300% profit is guaranteed upon listing," attracting victims. It is known that there were five sales teams with a total of 41 members. The police applied charges of organizing a criminal group to two sales teams with about 10 members each.

The sales teams used burner phones and fake business cards, communicated among employees via Telegram, and moved offices every 2 to 3 months to avoid victim reports and investigations by authorities, continuing their crimes even until the day of the police raid.

The police raided the offices they operated, arrested them in flagrante delicto, and preemptively seized cash and valuables worth about 350 million KRW before prosecution.

A police official stated, "This case exploited the public’s interest in stock investment and their expectation of high returns, and the CEO of the issuing company directly provided the corporate account for the crime, which expanded the damage," adding, "People should be especially cautious not to be deceived by claims of being investment experts online or guarantees of high returns."