Prosecutors Investigating 'Lime Scandal' Conduct Search and Seizure at KB Securities Headquarters

[Asia Economy Reporter Yoo Byung-don] The prosecution investigating the Lime Asset Management (Lime) fund fraud case, which caused damages worth approximately 1.6 trillion KRW, has conducted a search and seizure at KB Securities, the Lime fund distributor and total return swap (TRS) providing securities firm.

The Criminal Division 6 of the Seoul Southern District Prosecutors' Office (Chief Prosecutor Kim Rak-hyun) dispatched prosecutors and investigators to KB Securities headquarters in Yeouido-dong, Yeongdeungpo-gu, Seoul, from around 10 a.m. on the 28th to secure Lime-related materials.

The prosecution believes that KB Securities was partially involved in the improper sales and poor management of Lime's domestic funds and has initiated a compulsory investigation.

Earlier, the Financial Supervisory Service conducted an inspection related to the TRS contracts between KB Securities and Lime and handed over some investigation materials to the prosecution.

TRS is a loan-type fund provided by securities firms using funds as collateral. While it acts as a leverage to increase returns from the asset manager's perspective, if insolvency is revealed, it creates a structure that amplifies losses for investors.