Dayoun “Diane” Lee
A diane@decentlaw.ioDiane brings deep expertise in case review and analysis, developed through her experience as a litigation finance analyst. She provides strategic legal counsel across civil, criminal, and emerging asset classes, delivering practical, results-driven representation tailored to each client's needs.
- Criminal
- Civil
- Crypto
- Corporate & Biz
- Cross-border · Dispute Resolution
- VC · Financial Advisory
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법률정보Unlisted Stock Investment Fraud in Korea: Can You Recover Your Money?
Current Trends in Unlisted Stock Investment Fraud Unlisted shares are shares that are not traded on a public stock exchange. In Korea, these shares are often sold through private transactions, intermediaries, or over-the-counter channels. Because pricing information is not publicly available and the transaction process is often opaque, unlisted stock investments can easily become a source of fraud. A common pattern involves inducing investors to pay large sums based on claims such as “the company will soon be listed” or “a KOSDAQ listing is imminent.” Victims often wait for years, believing that the listing has simply been delayed, and may not realize that they have been defrauded until much later. Recently, fraud schemes have become more sophisticated. Rather than selling shares that do not exist, some perpetrators sell shares that actually exist but are of little value, inducing victims to purchase them at prices dozens of times higher than their real market value. Because the shares themselves may exist, victims often find it difficult to recognize the fraud at an early stage. This article explains the laws and court precedents that may apply to unlisted stock investment fraud in Korea, as well as the legal options available for recovering investment losses. Applicable Laws Several Korean laws may apply to unlisted stock investment fraud cases, depending on the facts, the amount of damage, and the role of each participant. Category Main Issue Statutory Penalty Fraud Obtaining money or property by inducing investment through false information Article 347 of the Korean Criminal Act: imprisonment for up to 10 years or a fine of up to KRW 20 million Aggravated Fraud Fraud involving damages of KRW 500 million or more Article 3 of the Act on the Aggravated Punishment of Specific Economic Crimes: imprisonment for at least 3 years Illegal Fund-Raising Receiving investment funds without authorization while promising principal or profit guarantees Articles 3 and 6(1) of the Act on the Regulation of Conducting Fund-Raising Business Without Permission: imprisonment for up to 5 years or a fine of up to KRW 50 million Violation of the Capital Markets Act Conducting unregistered investment advisory or discretionary investment management business Article 444 of the Financial Investment Services and Capital Markets Act: imprisonment for up to 5 years or a fine of up to KRW 200 million Depending on the scale of the damage and the manner of involvement, multiple charges may apply at the same time. Key Factors in Determining Fraud For fraud to be established in an unlisted stock investment case, the investigative authorities must examine whether there was deception and fraudulent intent at the time of the transaction. The Supreme Court of Korea has held that: “Unless the defendant confesses, fraudulent intent, which is a subjective element of fraud, must be determined by comprehensively considering objective circumstances such as the defendant’s financial condition before and after the act, the surrounding circumstances, the nature of the transaction, and the process of performance.” — Supreme Court Decision 2015Do10570, December 27, 2019 In other words, even if the perpetrator claims that they genuinely believed the company would be listed, investigative authorities and courts may still find fraudulent intent based on objective facts, such as the company’s financial condition, false explanations, and how the investment funds were used. In practice, investigators often focus on the following circumstances: False listing schedule: whether the perpetrator stated a specific listing timeline despite the lack of any realistic basis. Misuse of investment funds: whether the money was used for purposes different from what was promised to investors. Impossibility of performance: whether it was impossible from the beginning to transfer the shares or perform the promised obligations. Active involvement of intermediaries: whether an introducer or broker received commissions or directly participated in persuading the investor. Fraud organizations may also attempt to avoid liability under the illegal fund-raising regulations by avoiding direct phrases such as “principal guarantee.” Instead, they may use indirect expressions such as “repurchase commitment if listing fails” or “compensation for the difference if the public offering price is lower than expected.” Under Korean court practice, these types of clauses may still be interpreted as an agreement to preserve principal or profits under Article 2 of the Act on the Regulation of Conducting Fund-Raising Business Without Permission. Legal Strategy for Recovering Investment Losses Filing a criminal complaint does not automatically result in the recovery of the invested funds. In many cases, both criminal and civil procedures must be considered together. A criminal complaint can be useful because it allows investigative authorities to trace the flow of funds and secure evidence through compulsory investigation. If search and seizure is conducted at an early stage, it may help identify relevant accounts and determine where the investment funds went. Civil asset preservation measures, such as provisional attachment, are also important. These procedures are designed to freeze the perpetrator’s assets before they are disposed of or transferred. In many cases, filing for provisional attachment at the same time as, or shortly after, the criminal complaint can improve the possibility of recovery. The likelihood of recovery usually depends on the following factors: Assets held by the perpetrator: real estate, bank deposits, or other identifiable assets may be subject to provisional attachment. Traceability of funds: clear bank transfer records and account flows can make recovery more realistic. Scope of accomplices: if introducers, recruiters, or account holders were involved, it may be possible to pursue claims against those whose assets can be identified. Timing of response: the earlier the response, the more legal options may remain before the perpetrator disappears or disposes of assets. In unlisted stock investment fraud cases, the question is not only whether a criminal complaint can be filed. It is equally important to determine who should be targeted, what assets may be preserved, and which legal procedures should be pursued first. Review by DECENT Law Firm’s Criminal Defense and Fraud Response Team Unlisted stock investment fraud cases require a comprehensive legal review. The key issues include whether fraud can be established, whether accomplices can be identified, whether assets can be preserved, and how criminal and civil procedures should be coordinated. DECENT Law Firm’s criminal defense and fraud response team has handled unlisted stock investment fraud cases from the criminal complaint stage through asset preservation and recovery strategy. If your investment has not been returned, or if the person in charge has stopped responding, it is important to review your situation before more time passes. This content is provided for general informational purposes only and does not constitute legal advice for any specific case.
2026-06-02 -
법률정보
First-Time Drug Offense in Korea: When Are Deferred Prosecution and Suspended Sentence Possible?
Legal Issues in First-Time Drug Offense Cases In Korean drug offense cases, being a first-time offender can be a favorable factor. However, it does not automatically lead to deferred prosecution or a suspended sentence. Prosecutors and courts consider a range of factors, including the type of drug involved, the nature of the conduct, the number of uses, whether the case involved distribution or sale, and how the suspect responds during the investigation. This article explains when deferred prosecution and suspended sentences may be possible in first-time drug offense cases in Korea, and why early response during the investigation stage can significantly affect the outcome. Penalties Depending on the Type of Conduct The Narcotics Control Act of Korea classifies drug offenses based on the type of substance and the nature of the conduct. Even within the same drug-related case, the level of punishment can vary greatly depending on what the person is alleged to have done. Simple use or possession is generally assessed based on the type of drug, number of uses, whether there is a pattern of repeated use, and whether the person has any prior drug-related record. Involvement in transfer, delivery, or sale may be viewed more seriously than simple use. In these cases, how the substance was delivered, whether there was payment, and the person’s level of involvement become important issues. Drug sales or brokerage for profit are usually treated as more serious offenses. Depending on the substance and the degree of involvement, heavy statutory penalties may apply. For marijuana-related conduct, Article 61 of the Narcotics Control Act provides that certain acts involving marijuana may be punishable by imprisonment for up to five years or a fine of up to KRW 50 million. Although simple use or possession is generally treated less severely than sale, brokerage, or distribution-related conduct, the final outcome may still vary depending on the drug type, frequency of use, evidence of habitual use, and the suspect’s attitude during the investigation. When a First-Time Offender May Still Face Imprisonment Even if it is a first offense, imprisonment may still be imposed where aggravating circumstances are present. For example, the court may take a stricter view where the case involves repeated use of highly addictive substances, transfer or sale to another person, denial of the allegations despite clear evidence, concealment of evidence, or another criminal charge being prosecuted together with the drug offense. In these circumstances, the court may choose imprisonment over a suspended sentence. This is why it is important to clearly present favorable circumstances from the earliest stage of the case. A first-time offender status alone is rarely enough. The defense must show why the case should be treated as an isolated incident and why the risk of reoffending is low. When the Case May End Without Trial: Deferred Prosecution Deferred prosecution is a discretionary decision by the prosecutor. It means that the prosecutor recognizes the alleged offense but decides not to indict the suspect. Under Article 247 of the Criminal Procedure Act, prosecutors have discretion in deciding whether to bring charges. In practice, several factors are considered together. Deferred prosecution may be more likely where the suspect has no prior drug-related record, the conduct was limited to short-term use, the case involved personal use only, there was no transfer, recommendation, sale, or distribution to others, the suspect admits the facts and cooperates with the investigation, and there is a clear willingness to receive treatment or prevent recurrence. Family support, employment, stable residence, and other social ties may also be relevant because they can help show a lower risk of reoffending. However, even if these factors exist, deferred prosecution is never guaranteed. What matters is how concretely these circumstances are explained and supported with materials during the investigation stage. When the Case Goes to Trial: Suspended Sentence If the prosecutor files charges, a suspended sentence may still be possible. Article 62(1) of the Criminal Act allows the court to suspend the execution of a sentence for a period of one to five years where the sentence is imprisonment or imprisonment without labor for up to three years, or a fine of up to KRW 5 million, and where there are circumstances favorable to the defendant. In drug cases, courts consider both favorable and unfavorable factors. These may include whether the defendant has prior drug-related convictions, the number of offenses, the type and addictiveness of the substance, the level of reflection, whether the defendant has received counseling or treatment, family or community support, age, occupation, and overall living environment. A sincere apology alone is usually not enough. Courts tend to look for concrete signs of rehabilitation, such as treatment records, counseling participation, a prevention plan, and evidence that the defendant has stable social support. The court makes its decision by weighing all relevant circumstances. No single factor is determinative, but the overall presentation of the case can strongly influence the result. Why Early Response During the Investigation Stage Matters In first-time drug offense cases, the dividing line between imprisonment, suspended sentence, and deferred prosecution is often shaped during the investigation stage. Statements made during police or prosecutor questioning, the scope of admission, timing of cooperation, willingness to receive treatment, and the materials submitted to the authorities can all affect the direction of the case. Preparing only after questioning has already taken place may limit the available defense strategy. In many cases, it is more effective to review the facts, organize the expected issues, and prepare supporting materials before appearing for questioning. Treatment records, counseling records, family support statements, employment records, and a concrete plan to prevent recurrence can be important materials in showing rehabilitation potential. If You Have Been Contacted by Korean Investigators For a first-time drug offense in Korea, deferred prosecution or a suspended sentence is not automatic. The outcome often depends on how the case is handled from the beginning. The drug crime defense team at DECENT Law Firm assists clients from the early investigation stage through trial, including case analysis, preparation for questioning, legal opinion submissions, and sentencing strategy. If you have been contacted by Korean investigators or have received a summons for questioning, it is important to review your situation before attending the interview. This content is provided for general informational purposes only and does not constitute legal advice for any specific case.
2026-06-01 -
법률정보
False Naver Blog Posts Targeting Your Business in Korea: How to Request Removal
When Online Defamation Affects Your Business in Korea In South Korea, Naver remains one of the most influential online platforms for search, blogs, and reputation management. For businesses operating in Korea, what appears on Naver can directly affect customer trust, business inquiries, and brand credibility. In recent years, some businesses have discovered Naver blog posts that mention their company or brand name together with words such as “scam,” “fraud,” or “victim warning.” These posts may appear professional and persuasive, even when the underlying facts are inaccurate, misleading, or unrelated to the business itself. For foreign-owned companies or international businesses operating in Korea, this type of reputational damage can be especially difficult to detect and respond to. The content may be written in Korean, indexed on Naver, and viewed as credible by local customers before the company becomes aware of it. Under the Act on Promotion of Information and Communications Network Utilization and Information Protection (the “Network Act”), a business whose reputation or other rights have been infringed online may request deletion of the content or temporary blocking of access to the content. Applicable Law ▪️Article 44-2 of the Network Act: Deletion Requests and Temporary Measures Article 44-2(1) of the Network Act provides that a person whose rights, including privacy or reputation, have been infringed through information distributed via an information and communications network may request the relevant service provider to delete the information or publish a rebuttal. Under Article 44-2(2), once such a request is received, the service provider must take necessary measures, such as deletion or temporary blocking, without delay and notify both the requester and the person who posted the content. Where it is difficult to determine whether a rights infringement has occurred, or where a dispute between the parties is expected, Article 44-2(4) allows the service provider to temporarily block access to the content. The duration of such temporary measures may not exceed 30 days. ▪️Criminal Liability for Online Defamation If an online post contains false statements of fact that damage another person’s or company’s reputation, Article 70(2) of the Network Act may apply. The statutory penalty is imprisonment for up to seven years, disqualification for up to ten years, or a fine of up to KRW 50 million. Even if the statements are true, Article 70(1) may still apply if the post was made with intent to defame. In that case, the statutory penalty is imprisonment for up to three years or a fine of up to KRW 30 million. Category Legal Basis Possible Penalty Defamation by false statements of fact Network Act, Article 70(2) Up to 7 years’ imprisonment or KRW 50 million fine Defamation by true statements of fact Network Act, Article 70(1) Up to 3 years’ imprisonment or KRW 30 million fine Civil damages Civil Act, Article 750 Compensation for financial and reputational harm Criminal liability depends on the specific content, context, and intent behind the post. However, a business may still pursue platform-level removal or temporary blocking even where the criminal threshold is not yet clear. Key Legal Issues ▪️Scope of Defamation Under Article 44-2 The standard for requesting deletion or temporary blocking under Article 44-2 is broader than the standard for criminal defamation under Article 70 of the Network Act or Article 307 of the Criminal Act. In practice, the key issue is whether the online post infringes the company’s rights, including its reputation. It is not always necessary to prove criminal intent at the initial platform reporting stage. For example, if a Naver blog post places a company’s brand name next to terms such as “scam” or “fraud,” while the actual content concerns an unrelated impersonator or third party, the overall impression created for ordinary readers may still be misleading. In some cases, this may support a removal or temporary blocking request. Evidence of reputational harm is also important. Businesses should preserve records showing the impact of the post, such as customer complaints, cancelled inquiries, KakaoTalk messages, emails, screenshots, call logs, and changes in online search results. ▪️What Happens If the Poster Files an Objection If the person who posted the content files an objection, the temporary blocking may remain in effect for 30 days from the date the objection is received. After that period, the post may be restored. In that situation, the affected business may consider filing a defamation mediation request with the Korea Communications Standards Commission’s Internet Harm Relief Center. If mediation is successful, the settlement may have an effect similar to a civil settlement agreement. The Limits of Platform Reporting Alone Filing a removal request through Naver’s Rights Protection Center is an important first step, but it may not fully resolve the problem. If the poster files an objection, the content may be restored. If similar posts are uploaded again under different accounts or URLs, each post must usually be addressed separately. Where harmful posts are being published repeatedly or systematically, platform reporting alone may not be enough. In such cases, a formal letter of demand issued in the name of a Korean law firm, together with potential criminal complaints or civil damages claims, may be more effective. How Decent Law Firm Can Assist Responding to false or misleading online content in Korea requires more than simply submitting a platform report. Businesses must consider the wording of the removal request, the legal basis for rights infringement, the preservation of evidence, and the possibility of further civil or criminal action. Decent Law Firm assists businesses with each stage of this process, including removal requests, formal letters of demand, Korea Communications Standards Commission proceedings, criminal complaints, and civil damages claims where appropriate. If you have identified Naver blog posts or other online content that may be harming your business in Korea, please share the relevant URLs and a brief explanation of the impact. We will review the matter and advise on the most appropriate course of action. ※ This content is provided for general informational purposes only and does not constitute legal advice in relation to any specific matter.
2026-05-28
