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Photo courtesy of Yonhap News |
[Alpha Biz= Lee Joonhyun] Concerns are growing that news sections within home trading systems (HTS) and mobile trading systems (MTS) operated by South Korean brokerages have lost their core function of providing investment information, instead morphing into de facto promotional channels for high-risk stock loans.
Market observers note that certain market data providers and real-time news outlets are generating substantial revenue by placing advertorial-style content promoting stock loans, commonly known as stock loans, within brokerage trading platforms. The practice has prompted calls for urgent regulatory oversight by financial authorities.
News is the most frequently accessed content by investors using HTS platforms. However, critics point out that sensational headlines such as “Short of funds to buy [Company] shares?” or “Lowest-rate stock loans available” are increasingly mixed indiscriminately among legitimate news articles, blurring the line between objective information and advertising.
One major information provider is reported to distribute articles from dozens of affiliated media outlets to brokerage platforms while discreetly embedding stock loan links at the bottom of articles or publishing separate advertorial pieces. Meanwhile, real-time news providers have been accused of exploiting investors’ urgency by inserting promotional articles between breaking news updates to drive clicks.
A senior executive at one information provider was quoted as saying that advertorial-style articles are priced at 40,000–50,000 won per placement, with monthly revenue exceeding 100 million won—far surpassing standard fees paid by brokerages for information services.
Experts argue that brokerages are complicit in a structurally flawed arrangement by tolerating the practice.
Kim Soo-hyun, adjunct professor at the Institute for Future Talent Education at Hanyang University, said, “Brokerages cut costs while information providers profit from advertising. The risks and losses are ultimately passed on to retail investors who end up taking on high-interest loans. It is a deeply distorted structure.”
Kim added that in a market already suffering from severe information asymmetry, “trusted HTS platforms are effectively acting as amplifiers encouraging investors to borrow money to invest.”
Obstacle to ‘Zombie Firm Exit’ Policy and Calls for Stronger Accountability
The issue is also seen as undermining the government’s broader push to remove so-called “zombie companies” from the stock market and promote corporate value enhancement. Critics warn that distressed firms facing delisting risks could disseminate overly positive news through real-time feeds, combined with stock loan promotions tied to vague investment themes, effectively luring retail investors into speculative trades.
Legal experts stress that stronger measures beyond voluntary self-regulation by brokerages are required.
Park Hee-jung, a senior advisor at Bae, Kim & Lee, said, “Promoting high-risk loan products such as stock loans in the guise of news articles may violate obligations under the Financial Consumer Protection Act, including duties of explanation and prohibitions against unfair solicitation.”
“Regardless of whether such content is labeled as advertising, if it leads consumers to mistake it for objective investment information, regulators should intervene and impose sanctions,” Park said.
Proposed remedies include introducing quotas on advertorial content for news providers and brokerages, explicitly banning algorithm-driven top placement of promotional articles, and strengthening joint liability for brokerages when investor harm occurs.
“To prevent brokerage trading platforms from deteriorating into indiscriminate advertising boards, practices that disrupt market order must be subject to stringent scrutiny,” Park added.
Alphabiz 이준현 기자(wtcloud83@alphabiz.co.kr)
