Meritz and Yuanta Fined for Unfair Gains from Fund Sales

[Asia Economy Reporter Oh Ju-yeon] Yuanta Securities was fined by financial authorities for selling Discovery funds and receiving overseas training expenses for employees as compensation. Under the Capital Markets Act, investment brokerage firms must not receive financial benefits from stakeholders of financial investment products as compensation for recommending the sale of such products.

According to the financial investment industry on the 5th, on May 31, the Securities and Futures Commission decided to impose a fine of 30 million KRW on Yuanta Securities for receiving financial benefits related to the solicitation of specific financial investment products.

Yuanta Securities was found to have received international airfare, hotel accommodation fees, meal expenses, golf and tour costs, and souvenirs under the pretext of overseas training for company employees from stakeholders of the Discovery fund as compensation for selling the fund.

However, the company stated, "This is a separate fund from the Discovery fund, which was sold by Discovery Asset Management and caused a redemption suspension incident."

At the same time, the Securities and Futures Commission also imposed a fine of 143 million KRW on Meritz Securities for purchasing some funds expected to have redemption risks and receiving undue profits in the form of fees from the fund management company as compensation.