South Korean conglomerate Samsung abused the rights of minority shareholders last year to push through a controversial merger, and this year Seoul seems intent on making things worse by launching a dubious investigation into the hedge fund that led opposition to the merger. The message is that foreign investors enter South Korea’s politicized markets at their peril.

That’s the news as public prosecutors proceed with an investigation into how New York-based Elliott Associates amassed a stake in construction firm Samsung C&T....