Recruiting Complainants Until the 25th
[Asia Economy Reporter Park Jihwan] Legal action by Lime Asset Management investors is imminent. The key issues in this lawsuit are expected to be whether Lime Asset Management continued to sell the fund despite knowing there were problems with the fund management company, and whether the sales companies’ misrepresentation of the rate of return and credit insurance subscription constitutes grounds for contract cancellation.
On the 1st, the law firm Gwanghwa announced that it plans to sue Lime Asset Management on behalf of investors expected to suffer losses due to the cancellation of registration of the global investment advisory firm International Investment Group (IIG). Gwanghwa is recruiting plaintiffs until the 25th of this month through the online cafe "Lime Asset Management Redemption Suspension Victims Group." Several investors have already expressed their intention to participate in the lawsuit and have submitted necessary documents such as power of attorney and agent appointment forms.
The law firm Hannuri also decided on the 31st of last month to file a lawsuit against sales companies including Woori Bank and Shinhan Financial Investment, seeking to cancel the fund sales contracts themselves and claim the return of fund investments.
Generally, the legal measures investors can take regarding illegal activities related to fund products are largely divided into claiming damages against sales companies and asset management companies, and canceling fund contracts and claiming the return of investments against sales companies.
In the case of claiming damages, the likelihood of the plaintiff (investor) winning is high, but full compensation for the damages is difficult because some degree of investor fault during the investment process is considered. In this lawsuit, the key issue is whether Lime Asset Management pushed forward with fund sales even after knowing signs of insolvency appeared in the IIG hedge fund. Another point of contention is whether Lime fulfilled its duty to explain the change in investment targets, given that it transferred part of its shares and received promissory notes.
In lawsuits to cancel contracts against sales companies, the likelihood of the plaintiff’s claim being accepted is relatively low, but it is a way to receive full compensation for losses.
Attorney Song Seonghyun of law firm Hannuri explained, "Although the Lime fund was a fund of funds with multiple layers of indirect investment rather than a direct investment product, it was sold as if 'the investment money is directly invested in a global trade finance fund.' The manipulated rate of return (11.50%) presented during the sales process and the explanation that the investment product was covered by credit insurance will be key arguments in the contract cancellation lawsuit."
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