[Asia Economy Reporter Hwang Seoyul] Kim Mo (39), former team leader of the Delta One Solutions Department at KB Securities, who was prosecuted for negligence in duty of care and supervision related to the Lime Asset Management (Lime) scandal that caused damages worth about 1.6 trillion KRW, has appealed the first trial verdict.
According to the legal community on the 17th, Kim, who was indicted on charges including fraud under the Act on the Aggravated Punishment of Specific Economic Crimes, submitted an appeal to the Seoul Southern District Court Criminal Division 14 (Chief Judge Kim Donghyun) yesterday, citing unfair sentencing. Earlier, the first trial court sentenced Kim to two years in prison at the sentencing hearing on the 12th.
Kim and other KB Securities executives and employees were indicted on charges of deceiving victims and selling sub-funds despite knowing that the Lime main fund invested in unrated private bonds instead of ‘A-rated high-quality corporate bonds’ as stated in the proposal in March 2019. They were also charged with falsely indicating to customers that there were no sales commissions by covertly receiving fund sales fees as part of total return swap (TRS) commissions paid by Lime and other asset management companies.
The first trial court recognized only some of these charges as guilty. It judged that KB Securities falsely recorded that no fund fees were received when selling the fund. However, it acquitted the charges of selling to investors despite knowing the fund was deteriorating.
At that time, the court gave suspended sentences or probation to four former executives, including Ryu Mo, who were indicted for violating the Capital Markets and Financial Investment Business Act. It acquitted former Vice President Lee Jongpil, who was accused of colluding with KB Securities executives and employees.
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