Lee, celebrity stock analyst, held pretrial in fraud case

A local court approved the prosecution’s pre-trial detention warrant for a prominent stock analyst who gained popularity by sharing investment tips on television and social media, saying he allegedly gave his clients false information and sold stocks in the over-the-counter (OTC) market for far greater than their actual prices.

The Seoul Southern District Court said in a statement Wednesday night that the decision to detain him was due to fear he may escape or try to destroy evidence.

Prosecutors suspect that at least “several hundred people” were victimized by Lee Hee-jin, 30, who is known in Korea as “Cheongdam-dong jusik buja,” which roughly translates as “wealthy person in Cheongdam-dong who made a fortune by selling stocks.”

Lee earned at least 20 billion won ($18.36 million) through his shady deals, authorities said.

Lee was arrested by prosecutors on Monday, a little less than three weeks after the Financial Supervisory Service formally requested them on Aug. 17 to investigate Lee on possible violations of the Financial Investment Services and Capital Markets Act.

The financial watchdog said it received numerous complaints from stock investors accusing Lee of fraud. After questioning several alleged victims, the prosecution raided Lee’s office and home on Aug. 23 to confiscate paper documents and computer hard drives.

Prosecutors suspect Lee took advantage of the fact that the prices of OTC stocks are not made public, which enabled him to swindle naive clients who approached him for advice on how to get rich quick.

Lee has appeared on many television programs and labeled himself a “self-made man,” claiming he was born with a “dirt spoon” in his mouth, a term used to refer to people that have no inheritance from their parents.

He had over 100,000 followers on Instagram, where he often bragged about his Lamborghini, Rolls-Royce and Bugatti, offering advice on how people can make wise investments. At his company, Miracle Investment, where Lee worked as the CEO, he had thousands of clients, many of whom were suggested to buy stocks that soon plummeted, according to prosecutors.

BY CHAE SEUNG-KI, LEE SUNG-EUN [lee.sungeun@joongang.co.kr]