[Law Firm Now] YK Law Firm Joins Forces with Financial Fraud Prevention Coalition to Resolve 'Hong Kong ELS Incident'

MOU Signed on the 12th... Comprehensive Services Including Legal Consultation Provided
Preparing Civil and Criminal Litigation Against Domestic Commercial Banks Selling ELS Products

They are taking a commemorative photo after signing a Memorandum of Understanding (MOU) between YK Law Firm and the Financial Fraud Prevention Alliance on the 12th. (From left) Kyunghoon Kang, Chief Attorney at YK Law Firm, Seongju Gil, Chairman of the Financial Fraud Prevention Alliance. Photo by YK Law Firm

Law firm YK (representative lawyers Kang Kyung-hoon and Kim Beom-han) has joined forces with a group of investors affected by the 'Hong Kong ELS Incident' to work on damage recovery.

On the 13th, YK announced that it had signed a memorandum of understanding (MOU) the previous day with the Financial Fraud Prevention Coalition (Chairman Gil Seong-ju, hereafter FFPC) and victims of the Hong Kong ELS Incident to provide legal protection and enhance the rights of the affected parties.

This agreement was made with the purpose of protecting the rights of the large number of victims caused by the Hong Kong ELS Incident and systematically supporting legal responses to resolve the situation.

The FFPC is an organization formed in May by investors who suffered losses from the Hong Kong ELS Incident earlier this year. It addresses various financial fraud-related issues such as phishing, loan scams, and financial impersonation to ensure safe financial transactions for the public.

The Hong Kong ELS Incident was triggered when derivative products linked to the Hong Kong H Index, sold by major domestic banks, suffered massive losses due to a sharp stock price decline earlier this year. Approximately 170,000 individual investors incurred severe financial damages, with the total damage estimated to reach trillions of won.

Based on its investigation, the Financial Supervisory Service acknowledged the banks' negligence and issued a voluntary compensation recommendation ranging from 0 to 100%. However, the actual compensation rate averaged only 25 to 38%, leaving investors compensated for less than half of their actual losses.

The FFPC has raised issues claiming that the banks engaged in incomplete sales by failing to comply with relevant regulations and laws during the product sales process. It also criticized the Financial Supervisory Service for failing to perform its role as a transparent and proper supervisory authority and has urged the government and the National Assembly to reorganize the Financial Supervisory Service and expand state-run financial institutions such as postal savings.

In this situation, YK plans to expand various activities together with the FFPC to resolve the Hong Kong ELS Incident.

Through this agreement, the FFPC expects to receive substantial legal protection. According to the agreement, YK will provide comprehensive legal services, including legal advice, to address the legal issues faced by victims of the Hong Kong ELS Incident.

YK is preparing civil and criminal lawsuits on behalf of about 500 FFPC-affiliated victims against banks that sold ELS products, including Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank, NongHyup Bank, and SC First Bank. The lawsuits are being led by lawyers Choi Jin-hong (Judicial Research and Training Institute class 39) and Lee Sang-young (Bar Exam 2nd class).

Gil Seong-ju, chairman of the FFPC, stated, "Through cooperation with YK, victims of the Hong Kong ELS Incident will be able to receive stronger legal support," adding, "We expect that responses to large-scale financial frauds like the Hong Kong ELS Incident will be carried out more effectively."