Financial Supervisory Service. (Image courtesy of Yonhap)
SEOUL, June 18 (Korea Bizwire) – South Korea’s financial regulator has issued a consumer alert warning the public about a rise in fraudulent schemes involving fake promises of imminent stock market listings—an increasingly sophisticated scam targeting retail investors amid the country’s recent market rebound.
According to the Financial Supervisory Service (FSS), scam operators are falsely claiming that shares in unlisted companies are about to go public, luring victims with promises of extraordinary profits and minimal risk.
In one recent case, a man identified only as Mr. A was tricked into investing heavily in a non-existent biotech company called “B Life Sciences,” after being told the firm’s initial public offering (IPO) was imminent.
To build credibility, the scammers first deposited a single share into Mr. A’s account, which later appeared to yield a 30-fold return on paper. Encouraged by the seemingly successful investment, he wired a large sum for additional shares—only to later discover that the company was fictitious and the operators had vanished with the funds.
The scheme relied on a tactic known as “pre-listing bait,” where scammers purchase a small quantity of low-value shares in a real but obscure unlisted company, deposit them in a victim’s account, and use fabricated performance data to simulate gains. Victims are then encouraged to invest larger amounts based on the illusion of legitimacy.
The FSS noted that these scams often leverage hard-to-verify claims about breakthrough technologies or foreign investment deals. Fraudsters also exploit informal channels such as messaging apps, email, and fake financial advice websites—offering short-term gains through “try-before-you-buy” stock delivery schemes to build trust.
“Any unsolicited offer to buy pre-IPO shares based on the promise of an upcoming listing—especially if advertised in public forums or unregulated channels—should be viewed with extreme suspicion,” the FSS warned. “Licensed financial firms do not engage in individual investment solicitations via chatrooms or emails.”
Under the administration of President Lee Jae-myung, the government has pledged stronger oversight of retail financial markets, especially as more individual investors turn to equity markets for yield. The warning comes as U.S. President Trump’s second term introduces heightened global market volatility, adding further urgency to investor protection efforts.
Authorities are urging the public to verify investment opportunities through official financial institutions and to report suspected fraud immediately.
M. H. Lee (mhlee@koreabizwire.com)
