Why famous celebrities always appear in events

Singer Lim Chang-jung is in the spotlight as he is embroiled in suspicions of stock price manipulation. In fact, it is not yesterday or today that famous celebrities are mentioned in scandals related to stock price manipulation and fraud. The main reason why stock price manipulation forces and fraudsters reach out to celebrities is to use the stars' images and recognition to attract investors.

There has been a lot of noise recently due to stock price manipulation by SG Securities. Eight stocks suddenly hit their lowest prices for no particular reason. Financial authorities detected stock price manipulation and banned the 10 people involved from leaving the country. Victims began to appear one after another from all over the place. Here, Lim Chang-jung became a hot topic by saying, “I also have a debt of 6 billion won.”

Lim Chang-jung invested 3 billion won, trusting the stock manipulator, and even handed over his identity card and name. 3 billion won became 5.8 billion won in one and a half months. Lim Chang-jeong, who said he did not notice anything strange at this time as the graph was rising and profits were made, is claiming to be a victim when he suffers losses.

However, most people reacted coldly, wondering if Lim Chang-jung was also involved in stock price manipulation. This is because he appeared on a broadcast run by stock manipulators and also invested in a golf course acquired by them. Also, on the 27th, a media outlet reported that actors Lim Chang-jung and Seo Ha-yan attended a party held by the group to commemorate exceeding 1 trillion won in operating funds. It is expected that suspicion will continue.

Lim Chang-jung is not the only celebrity mentioned in the SG incident. Singer Park Hye-kyung is also known to have suffered damage. Noh Hong-chul was offered an investment by a stock manipulator who approached him through golf lessons, but he declined.

Cryptocurrency scams using celebrities also appear consistently. At the end of last year, the so-called S Coin incident, an ‘investment reading room fraud,’ occurred. The fraudsters made investors buy coins by guaranteeing high profits, then sold them immediately when the coin price soared and pocketed tens of billions of won.

The coin's promotional models are popular actors Lee Je-hoon and Kim Sa-rang. In an interview with a media outlet, the victim of the S Coin incident said, "I invested a small amount, but later on, I kept increasing the investment amount because I actually sponsored dramas and celebrities appeared in advertisements. Then, I ended up losing everything." Lee Je-hoon and Kim Sa-rang were simple advertising models, but their influence was great. Investors who have suffered damage tend to say things like, 'I believed it because it was a celebrity...'

The late Park Jeong-woon, a popular singer in the 1990s, was also involved in a 200 billion won virtual currency fraud. The fraud group used a pyramid scheme to recruit investors. When new investors were brought in, the rating went up and more dividends were paid. Park Jeong-woon, who was in charge of publicity, said, "I didn't know it was an illegal multi-level scam," and claimed, "It was my role to bring excitement by inviting younger singers."

Female celebrities appear in major scandals commonly called 'gate'. ‘Fake Fisherman Gate’ or ‘Squid Gate’ emerged in 2021. At the time, it was surprising that the connections of Mr. Kim, a fake repairman who was suspected of fraud worth tens of billions of dollars, were known. Mr. Kim claimed to be in a romantic relationship with singer and actress Son Dam-bi. Actors Jeong Ryeo-won and Park Ha-sun were also mentioned and were embroiled in sponsor rumors, but they all said they were not involved.

In particular, it became a hot topic that Kim gave expensive gifts to Son Dam-bi to win her favor, but Son Dam-bi said she returned them all. Son Dam-bi's image took a huge hit due to this incident.

Fraudsters and gangs looking to make a big deal use their friendship with famous celebrities to show off their presence or gain trust. If they gather investors like that, they embezzle tens of billions of won and disappear into hiding. After the incident actually broke out, it was a bittersweet situation where attention was focused on the celebrities involved rather than the people who committed the fraud.

Of course, the celebrities involved in the actual incident are not exonerated. It is necessary to review from various angles the ripple effects of one's image and influence. At the agency level, there is a need to become more detailed in risk management, such as attaching a professional asset manager.

Ten Asia Reporter Kim Seo-yoon seogugu@tenasia.co.kr