Woori Finance Chairman’s job suspension… Prosecution of the Minister and Shinhan Financial Group
“If you sell even though you know the fund is insolvent, it is a fraudulent accomplice or helper”
[아시아경제 이선애 기자] While the Financial Supervisory Service has notified executives of Lime Asset Management (Lime) fund sales companies of severe disciplinary action, the possibility of additional prosecution by corporations is emerging. It is noteworthy that if a corporation’s criminal responsibility is recognized, it can affect civil lawsuits conducted by victims against vendors.
According to financial institutions on the 7th, the Financial Supervisory Service sent a notice of preliminary sanctions related to the test results to Woori Bank, a Lime fund seller, on the 3rd, and informed Woori Finance Chairman Son Tae-seung, who was the head of Woori Bank at the time of the Lime crisis, of the’recession of job suspension’. Job suspension is the second highest among the five levels of sanctions for executives of financial companies, following the recommendation for dismissal.
Earlier, the Financial Supervisory Service issued the same disposition to former KB Securities CEO Yoon Gyeong-eun, Kim Hyung-jin, former Shinhan Financial Investment CEO, and Na Jae-cheol, former Daishin Securities CEO, during a Lime-related sanctions trial last year. The main reason for sanctions is that vendors have not properly established internal control standards and neglected management.
After the announcement of sanctions by the FSS, the prosecution charged Shinhan Geumtu and Daeshin Securities to be responsible for “negligence of employee management supervision” and indicted the two corporations with punishment regulations for fraudulent fraudulent transactions and unfair solicitation. This is the first case in which a sales company has been handed over to criminal trial in connection with fraudulent fraudulent transactions and incomplete sales of private equity funds.
KB Securities and Woori Bank’s lime-related suspicions that have not yet been prosecuted are being investigated. Last year, the prosecution confiscated KB Securities and Woori Bank to obtain data on Lime Fund sales and management. Chairman Son was also confiscated and searched in connection with the allegations of illegal solicitation by former Daegu High Prosecutor’s Office Yoon Gap-geun.
According to the investigation situation, there are also observations that it will be difficult for the Lime Fund managers of Woori Bank and KB Securities to avoid criminal liability.
Woori Bank had the largest sales of Lime Funds at 357.7 billion won, and KB Securities provided a total income swap (TRS) loan to Lime. Employees of these vendors are suspected of continuing to sell the Lime Fund, hiding it even though they knew about the insolvency.
In the legal world, the view is predominantly that the prosecution will prosecute the Lime Fund managers of each bank, and that the corporation will also be handed over to trial according to the punishment rules. Corporations prosecuted under the concessionary punishment rule are fined even if they are convicted, and thus have little meaning as punishment. However, if criminal liability is recognized, it can affect dispute settlement or lawsuits for claiming damages, which determine the loss compensation ratio of victims.
The Korea Financial Justice Association said, “If you continue to sell and receive commissions with the intent to deceive customers even if you know the fund is insolvent, it can be regarded as a fraudulent accomplice or helper.” You can be subject to punishment,” he said.
Reporter Sunae Lee [email protected]