Court orders Deutsche Bank to pay investors damagesA lower court ordered Deutsche Bank on Friday to compensate investors for damage it caused by manipulating stock prices, in the nation’s first-ever ruling on a securities-related class-action suit.
The Seoul Central District Court ordered the Germany-based financial services company to pay a total of 8.55 billion won ($7.28 million) to six plaintiffs who invested in local equity-linked securities products in 2007.
An ELS is structured to link yields to the performance of underlying assets, such as individual stocks. The instrument does not guarantee principal but promises relatively high yields.
The plaintiffs invested in Korea Investment & Securities’ ELS products based on shares of KB Kookmin Bank and Samsung Electronics in 2007. Deutsche Bank, which Korea Investment contracted with to hedge the products, lowered KB Kookmin’s stock prices by unloading its shares just before the market closed on the expiry day in August 2009. The plaintiffs claimed they suffered an around 25 percent loss from their investment.
The ruling marked the first case made under the Securities-Related Class Action Act since the law took effect in 2005. YONHAP
with the Korea JoongAng Daily
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