"Beware of Finfluencer Recommendations on YouTube"... FSS Detects Signs of Illegal Activities

FSS Launches Dedicated Monitoring Task Force
Five Unregistered and Unreported Channels Detected

Evidence has been found of illegal activities by five YouTube channels that either recommended stocks for a fee without proper authorization or sold automated stock trading programs.

On April 12, the Financial Supervisory Service (FSS) announced, "Amid concerns that some 'finfluencers' (a combination of finance and influencer) are providing inappropriate investment information or leading unfair trading, taking advantage of market volatility caused by the situation in the Middle East, we have launched a dedicated monitoring task force."

Of the five YouTube channels where illegal activities were detected, four provided investment advice or recommendations on financial investment products without registering as investment advisory businesses, which may constitute a violation of the Capital Markets Act.

Three channels conducted technical analysis of domestic stocks or recommended specific stocks to members, charging monthly fees ranging from 2,990 won to 600,000 won based on membership tier. Another channel, in exchange for fees, recommended trading timings for US leveraged exchange-traded funds (ETFs) by analyzing West Texas Intermediate (WTI) crude oil prices.

There have been previous reports of similar damages. One YouTuber, without registering as an investment advisory business, posted videos predicting target closing prices for domestic tech stocks and provided advice on stock choices and trading timing to an unspecified number of viewers who purchased a membership. An investor who watched this content invested approximately 10 million won and ended up with a loss of about 2 million won.

Another YouTuber was found to have sold a self-developed automated stock trading program without registering as an investment manager, despite acting as an unregistered investment advisor.

The FSS has referred finfluencers operating unregistered or unreported financial investment businesses to law enforcement. Additionally, the agency plans to inspect and investigate even those who have reported but are still engaging in illegal acts, such as unregistered investment advisory or discretionary investment services.

The FSS will also investigate actions such as recommending investments or spreading false information without disclosing personal interests, recommending stocks one already owns and then selling them for profit after inducing buying pressure, and other forms of front-running. These cases will be subject to FSS investigations and special judicial police inquiries.

The FSS stated that, depending on the case, it intends to actively cooperate with overseas financial authorities and is determined to root out illegal financial activities committed by finfluencers. One-on-one investment counseling and individual investment advice by unregistered investment advisors are strictly illegal.

The agency also urged consumers to report any suspicious cases, warning that blindly trading stocks recommended by finfluencers could result in significant losses.

This content was produced with the assistance of AI translation services.