The Financial Supervisory Service urged investors to be cautious of investment fraud that lures them with the impending listing of unlisted stocks. The perpetrators establish fake corporations with names similar to existing unlisted corporations and distribute false information before soliciting stock purchases.
The FSS noted on the 17th that as the investment sentiment in the domestic stock market shows signs of recovery, investment fraud using the lure of 'impending listing' of unlisted stocks is rampant, and a 'consumer alert' has been issued.
They create non-existent unlisted corporations and exaggerate business content that is difficult for ordinary investors to verify, such as new technology development, sales performance, and attracting investments. They entice investors by claiming that they can make a significant profit after the initial public offering (IPO) through free stock trading rooms, but in reality, they are defrauding the investment funds, resulting in losses.
In fact, a case of investment fraud using 'A Biotechnology' was reported to the FSS. The fraudster, impersonating a legitimate investment company, gathered investors by offering free stock information and claimed that A Biotechnology was close to an IPO and would repurchase shares if the listing failed, thus enticing investments.
To avoid raising suspicions among investors, they also employed a method of pre-purchasing stocks. After accumulating shares of the unlisted Company A at low prices, they provided the shares to investors who showed interest in investing and collected their investment funds. Investors mistakenly believed they were acquiring shares of A Biotechnology and remitted payment for stock purchases.
They approached investors who received shares of Company A, disguising themselves as a third party, and deceived them by promising to buy back shares at high prices, creating an illusion of actual profits. By suggesting prices up to 30 times the purchase price, they stimulated the 'high-return expectations' for the soon-to-be-listed shares.
However, the actual Company A was a regular business unrelated to the listing, and the investment fraud gang absconded after embezzling a large amount of investment funds.
The FSS advised investors to be suspicious of any solicitation for purchasing unlisted stocks under the pretext of 'impending listing' or 'planned listing' by emphasizing that such opportunities promise high returns. It noted that damages from transactions with illegal firms are not covered by the FSS's dispute resolution, making it challenging to recover losses, and urged investors to directly verify the facts with the respective financial companies when they claim to represent legal financial institutions.
The FSS stated, 'If suspicious illegal financial investment solicitations arise, they should be reported promptly through the Financial Supervisory Service or the Korean National Police Agency,' adding, 'Only fast reporting can help prevent the concealment of criminal proceeds and further harm.'