600-Person Class Action Lawsuit... Collecting Evidence of Incomplete Sales
Lee Bok-hyun "Compensation Won't Change Even If It Goes to Court"
As banks begin compensation related to the incomplete sales of Hong Kong H Index (Hang Seng China Enterprises Index·HSCEI) based equity-linked securities (ELS), subscribers angered by the low compensation rates have expressed their intention to participate in a class-action lawsuit in large numbers.
According to the financial sector on the 10th, the Hong Kong ELS subscriber group has secured about 600 participants for the legal lawsuit. They are currently collecting evidence of incomplete sales such as proxy subscriptions, document forgery, and false recordings, and organizing them by type. They plan to proceed with criminal charges through Law Firm A and then continue with civil lawsuits.
Gil Seong-ju, chairman of the Hong Kong ELS Victims Association, said in a phone call, “According to the banks’ compensation plan, there will likely be no cases where more than 50% of the damage amount is compensated,” adding, “Some subscribers may receive 100% compensation if it goes to court.” A representative from Law Firm A said, “Nothing has been finalized yet. We are reviewing it.”
Victim B, who decided to participate in the lawsuit, said, “I did not intend to sue from the beginning. The problem is that the compensation plan proposed by the Financial Supervisory Service is far from the victims’ demands,” and added, “We expect a ruling similar to full compensation, which we hope for.” Another participant, C, said, “I am on my way to send registered mail to Law Firm A now,” and added, “I have been collecting evidence such as forged signatures for the past three days except for meal times.”
The reason the subscriber group is filing criminal lawsuits first is to facilitate the subsequent civil trials. Lawyer Yoon Ye-rim (Law Firm Gildo) explained, “It is legally difficult to prove the seller’s intent or negligence, but if a guilty verdict is obtained first in a criminal lawsuit, it becomes easier to prove damages in a civil lawsuit,” adding, “Even if the case is not prosecuted or results in acquittal, investigation records from the prosecution and other evidence can be used in civil trials.”
Citizens' groups, including the Hong Kong ELS Victims Association, held a press conference on the afternoon of the 24th of last month in front of the Financial Supervisory Service in Yeouido, Seoul, calling for the prosecution and full compensation of 180 individuals, including financial institutions, executives, and former Financial Services Commission chairpersons responsible for the damages caused by Hong Kong H Index (Hang Seng China Enterprises Index·HSCEI) based equity-linked securities (ELS). They shouted slogans during the event. [Image source=Yonhap News]
Earlier, on the 24th of last month, civic groups including the Hong Kong ELS Victims Association filed complaints with the Financial Supervisory Service against 18 corporations and 162 individuals. The corporations included financial holding companies such as KB Kookmin, Shinhan, Hana, NongHyup, as well as Samsung Securities, Mirae Asset Securities, and Korea Investment & Securities. The list of defendants also included executives and outside directors of these companies, as well as former Financial Services Commission Chairman Eun Sung-soo and former Financial Supervisory Service Commissioners Yoon Seok-heon and Jung Eun-bo.
Meanwhile, Lee Bok-hyun, governor of the Financial Supervisory Service, expressed confidence that the compensation outcome would not differ significantly even if the case goes to court. After the ‘Open Discussion with Individual Investors’ held at the Korea Economic Association in Yeouido, Seoul on March 13, Lee told reporters, “Internal legal experts, accounting professionals, and dispute mediation specialists at the Financial Supervisory Service have reviewed similar cases and precedents,” adding, “(The Financial Supervisory Service’s dispute mediation standards) allow for conclusions equivalent to judicial rulings without going to court.” He further said, “For individuals, lawsuits are not easy in terms of cost and time. Litigation is very exhausting for people.”
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