South Korean retail investors reported losing about US$250 million to stock-related scams in the first half of 2026, with fraudsters exploiting sharp market swings and growing interest in equities.
Police investigated 3,506 cases linked to stock tip chatrooms between January and June involving 336 billion won or about US$246.57 million, according to police data reviewed by Reuters.
While the number of cases increased 4.1% from the same period last year, the amount of money involved jumped 19.8%.
South Korea’s KOSPI was the world’s best-performing stock benchmark during the first half of the year but subsequently fell as much as 44% from its June 19 peak, creating opportunities for scammers to target investors during periods of heightened market uncertainty.
Lawyers specialising in financial fraud told Reuters that scammers capitalised on fear of missing out during the market rally, particularly among inexperienced retail investors.
“Volatility creates favourable conditions for criminal organisations,” said Kim In-ho, an investigator at Jeongbyeok Law Firm who specialises in helping fraud victims.
How The Stock Scams Worked
Scammers often posted comments under videos by well-known brokerage analysts or financial influencers before directing followers into private chatrooms.
Some groups charged subscription fees ranging from thousands to hundreds of thousands of dollars for stock recommendations, while others persuaded victims to transfer money directly for investment.
Lawyer Lee Tae-kyung of Wanbong Law Firm said rising market volatility could make retail investors more uncertain and vulnerable to such tactics.
“When market volatility rises, so does uncertainty and that’s when retail investors’ psychology gets shakier,” Lee said. “These groups exploit that, telling people to trust them.”
The Financial Supervisory Service said it did not have data on illegal stock-tipping chatrooms and that investigating such cases was the responsibility of law enforcement agencies.
Victim Lost 60 Million Won
In June, Seoul police said they had arrested 10 people over a scam allegedly operated from Cambodia that defrauded 59 South Koreans of about 9.9 billion won over two years.
The group allegedly impersonated securities firm employees and encouraged victims to buy stocks recommended by artificial intelligence through fake investment apps.
One victim, a 47-year-old logistics worker identified only as Jay, told Reuters he lost 60 million won after joining a stock investment chatroom in February.
He said he entered the group through a TikTok video that he believed had been posted by the director of a well-known securities firm.
The group initially shared stock market commentary before members began discussing large returns from investments made through supposed staff of the securities firm.
Jay eventually borrowed money and transferred 20 million won to invest.
He later sent another 40 million won after the group promoted what it described as a rare opportunity involving a construction company expected to benefit from potential post-war reconstruction in Iran. He believed the investment could deliver a 600% return.
The chatroom shut down in April and its members disappeared.
Jay has since filed a criminal complaint with police and a civil complaint against the holder of the bank account to which he transferred the money.
He has also taken on two side jobs to repay his debts.
“My advice to any newcomers to the stock market is doubt every tip you are given.”
