FSS committee orders NH Investment to return Optimus principals to investors

The front gate of the private equity fund Optimus Asset Management's office in Gangnam District, southern Seoul. [NEWS1]

A dispute settlement committee under the Financial Supervisory Service (FSS) on Tuesday ordered NH Investment & Securities to return all of the invested principals related to problematic Optimus Asset Management funds to investors.

The brokerage was a major seller of Optimus funds, which resulted in huge investor losses last year. While the asset management marketed its fund products to be "safe,” claiming funds were invested into account receivables of public institutions, it was found that most of the money had been invested into bad assets.

The FSS committee's decision is for two out of 326 cases requested on dispute settlement, but the decision essentially means the FSS believes the brokerage should return principals to all fund investors as the two were picked as exemplary cases.

As the FSS committee's decision is not legally binding, NH Investment & Securities needs to agree to the decision within the next 20 days for the mediation to be finalized. If the brokerage agrees, it will likely have to pay back some 300 billion won ($267 million) to Optimus fund investors excluding principals invested by professional investors.

BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]