A Retail Trading Army Has Been Roiling Korean Stocks for Months

In late July, 70-year-old Kim Kyung-rok began frantically sifting through his long-dormant stock brokerage account. The South Korean retiree, who in 2000 left a 16-year career as an import-­export clothing trader, had been watching the country’s stock market surge from its March lows on a wave of easy money. “I was bored, and many people around me were making profits from stock trading,” says Kim, a wheelchair user and the grandfather of a toddler. “I was hoping to make some quick cash for my family and that I could use to travel or dine at nice restaurants.”

It was a text message promising “20% returns guaranteed” if Kim joined an online stock-tipping club that lured him back into the stock market. He took the plunge at the end of July, forking out the equivalent of $5,000 to join the club and placing a call to his broker for the first time in seven years. By late September, Kim had invested $30,000 of his savings into the market, based on the club’s tips. His portfolio was down 10%; the South Korean stock market was up by the same amount. “That stock-tipping club really fooled me by their impressive sales pitch and guarantee of profits,” he says.