The Financial Supervisory Service issued a consumer alert over illegal stock-tipping chat rooms that solicit investments in overseas stocks. It urged people to take precautions in advance, noting that victims of illegal tipping-room scams may find it impossible to recover losses.
The Financial Supervisory Service (FSS) said on the 29th, "Illegal operators riding the recent craze for overseas stock investing are engaging in illegal tipping by urging investments in foreign stocks," and announced it is issuing a consumer alert at the "caution" level.
According to the Financial Supervisory Service (FSS), the illegal tipping rooms it uncovered lured investors into private chat rooms through social media (SNS) posts and videos such as "high-return U.S. stock investment strategies." In the private rooms, they shared screenshots "proving" profits in real time, or a person introducing himself as a stock investment expert recommended shares of "Company M," listed on an overseas exchange, and urged concentrated buying. They enticed investors by saying returns of 200% to 400% were possible.
At first, they built trust with small investments, but when the stock price plunged later, they demanded attorney fees, saying "a major shareholder illegally sold shares." The operators of the illegal tipping rooms then disappeared, but there were also cases in which the illegal firms disguised themselves as third parties and demanded part of the loss amount under the pretext of helping recover damages.
The Financial Supervisory Service (FSS) advised, "When someone posing as an investment expert approaches you online, there is a high chance they will disappear after pocketing your investment funds," adding, "Be sure to verify whether the person offering investment advice is an 'investment advisory business' or a 'quasi-investment advisory business.'"
It also asked the public to take note that online financial scams often originate overseas, making crackdowns and legal action against illegal operators difficult and, as a result, recovery of damages unlikely.
The Financial Supervisory Service (FSS) said, "It is difficult to obtain relief for damages arising from a transaction with an illegal operator," and added, "Keep in mind that all information encountered online can be falsified."