Daishin Securities ordered to pay up to 80% of Lime losses

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Daishin Securities ordered to pay up to 80% of Lime losses

Korea's financial regulator on Thursday ordered Daishin Securities to compensate an investor up to 80 percent of losses due to the brokerage's misselling of funds run by now-defunct Lime Asset Management.
 
The reimbursement rate against Daishin Securities marked the highest among banks and brokerage firms that sold Lime Asset funds, according to a dispute settlement committee of the Financial Supervisory Service (FSS).
 
Previously, the FSS ordered KB Securities to compensate investors up to 60 percent of losses they incurred in the misselling of Lime Asset funds.
 
In a major hedge fund fiasco, Lime Asset, once the nation's biggest hedge fund, froze withdrawals from its funds in 2019, citing a cash crunch.
 
Lime has been under probe over selling and running fraudulent financial products and subsequent suspension of fund redemption worth an estimated 1.6 trillion won.
 
The fraud scandal involving Lime has roiled the nation since last year and developed into a high-profile lobbying scandal, in which former and incumbent government officials and politicians are implicated. Last month, a former senior prosecutor was sentenced to three years in prison for taking bribes from a real estate developer financed by the hedge fund in 2019.
 
Earlier this year, a Seoul court handed down the 15-year prison term to Lee Jong-pil, the hedge fund's former vice president, along with a fine of 4 billion won.
 
The court found him guilty of deceiving investors by concealing the massive loss the company's fraudulent fund product was making.
 
Yonhap
 
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