"I've Never Bought a Single Stock"... Hong Joonpyo Opens Up About What Happened 26 Years Ago

Invested in an unlisted venture company at a fellow lawyer's urging

Lawyers' total losses exceeded 5 billion won

"Kept quiet for fear word would get out that lawyers had been scammed"

Hong Joonpyo, former mayor of Daegu, revealed that he lost 130 million won to investment fraud while working as a lawyer. He said that the lawyers who were victimized at the time could not tell others about the fraud and quietly let the matter pass, and that he had never invested in stocks since the incident.

On October 31, Hong mentioned his experience with stock investing on his social media account and recounted what happened in the past. "I have never bought a single stock listed on the stock market," he said. "That also means I didn't have enough spare money to invest in stocks."

He said that in April 2000, during the Kim Dae-jung administration, he invested in an unlisted company at the urging of a fellow lawyer, amid a boom in investment in venture businesses. Believing the claim that an investment of 130 million won would increase the value of his stake tenfold, Hong persuaded his wife to invest as well, but ultimately lost the entire investment.

Hong Joonpyo, former mayor of Daegu, revealed that he lost 130 million won to investment fraud while working as a lawyer. Yonhap News Agency

Hong alleged that the fellow lawyer behind the fraud took investment money not only from him but also from other lawyers practicing in Seocho-dong. He said the total losses exceeded 5 billion won.

"That lawyer swindled more than 5 billion won from lawyers in Seocho-dong, but could they have continued practicing if word got around that lawyers had been defrauded?" he said. "All the lawyers who were deceived were too embarrassed to let others know, so they kept quiet and put the matter behind them."

The year 2000, which Hong referred to, was when the so-called "venture boom" reached its peak in South Korea. After the foreign exchange crisis, the government began promoting the information technology (IT) industry and venture businesses, spurring a wave of startups and investment, while the KOSDAQ market grew rapidly. The launch of the KOSDAQ market in 1996 and the enactment of the Act on Special Measures for the Promotion of Venture Businesses in 1997 laid the foundation for the industry's growth.

Investment enthusiasm spread particularly among internet companies from 1999, driving up the valuations and share prices of venture businesses rapidly. However, the stock bubble began to deflate in the spring of 2000, and the KOSDAQ Venture Index plunged later that year.

Hong said he completely stopped investing in stocks after the incident. "Since then, I have never invested in stocks, not even once," he stressed.

He also expressed concern about recent conditions in the stock market. Hong said he was worried that individual investors were suffering losses amid a sharp decline in share prices, and added that he hoped the stock market rally fueled by the artificial intelligence (AI) and semiconductor booms would continue steadily at a level aligned with the real economy.

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