ID :
28470
Tue, 11/04/2008 - 21:55
Auther :
Shortlink :
http://m.oananews.org//node/28470
The shortlink copeid
Investors file lawsuit against asset management company
SEOUL, Nov. 4 (Yonhap) -- Hundreds of investors filed a class action lawsuit on Tuesday against banks and an asset management company whose funds resulted in massive losses of their money amid the global financial downturn.
In a group complaint filed with the Seoul Central District Court, some 220
investors demanded compensation for both the loss of 7.6 billion won (US$6
million) by Woori CS Asset Management and mental duress.
They also brought legal action against major banks and brokerages that sold the
funds, such as Hana Bank, Woori Investment and Securities, and Dongbu Securities.
The fund's operation was linked to South Korean stock market performance and
guaranteed by Lehman Brothers.
"In the fund, we chose BNP Paribas as the guarantor, but Woori CS changed it to
Lehman Brothers without notice," said the group.
They claimed that Lehman Brothers' credit rating was lower than that of BNP
Paribas at the time.
About 900 people in total bought the derivative, worth about 28 billion won,
whose profit marked minus 38 percent. Its repurchase was suspended as Lehman
Brothers filed for bankruptcy in September.
Most individual investors and derivative buyers in South Korea incurred severe
losses in the stock market as Seoul's benchmark Korea Composite Stock Price Index
(KOSPI) plunged 38 percent between September and October as the world economy
fluctuated in the aftermath of U.S.-sparked financial crisis.
"The banks didn't notify us of the risks of the product when selling it," said
the group. "We demand that the banks return the principal and interest by
terminating the contract."
The suit is the first legal case in Korea filed by individuals who lost money as
the result of the collapse of Lehman Brothers, although it is not a direct party
to the complaint.
On Monday, South Korean exporters filed a class action suit against major
lenders, claiming the currency options they hold are unfair and should be
nullified amid huge losses caused by the won's steep decline.
Hundreds of small-scale exporters entered into "knock-in knock-out" (KIKO)
currency option contracts in recent years to hedge against the won, which has
fallen more than 30 percent against the greenback so far this year.
The combined losses of the plaintiffs reached 1.7 trillion won (US$1.3 billion)
as of August, according to the Financial Services Commission.
The suit involves 13 foreign and local lenders, including U.S. Citibank and
British Standard Chartered Bank, as well as South Korea's Shinhan Bank and Korea
Exchange Bank.
In a group complaint filed with the Seoul Central District Court, some 220
investors demanded compensation for both the loss of 7.6 billion won (US$6
million) by Woori CS Asset Management and mental duress.
They also brought legal action against major banks and brokerages that sold the
funds, such as Hana Bank, Woori Investment and Securities, and Dongbu Securities.
The fund's operation was linked to South Korean stock market performance and
guaranteed by Lehman Brothers.
"In the fund, we chose BNP Paribas as the guarantor, but Woori CS changed it to
Lehman Brothers without notice," said the group.
They claimed that Lehman Brothers' credit rating was lower than that of BNP
Paribas at the time.
About 900 people in total bought the derivative, worth about 28 billion won,
whose profit marked minus 38 percent. Its repurchase was suspended as Lehman
Brothers filed for bankruptcy in September.
Most individual investors and derivative buyers in South Korea incurred severe
losses in the stock market as Seoul's benchmark Korea Composite Stock Price Index
(KOSPI) plunged 38 percent between September and October as the world economy
fluctuated in the aftermath of U.S.-sparked financial crisis.
"The banks didn't notify us of the risks of the product when selling it," said
the group. "We demand that the banks return the principal and interest by
terminating the contract."
The suit is the first legal case in Korea filed by individuals who lost money as
the result of the collapse of Lehman Brothers, although it is not a direct party
to the complaint.
On Monday, South Korean exporters filed a class action suit against major
lenders, claiming the currency options they hold are unfair and should be
nullified amid huge losses caused by the won's steep decline.
Hundreds of small-scale exporters entered into "knock-in knock-out" (KIKO)
currency option contracts in recent years to hedge against the won, which has
fallen more than 30 percent against the greenback so far this year.
The combined losses of the plaintiffs reached 1.7 trillion won (US$1.3 billion)
as of August, according to the Financial Services Commission.
The suit involves 13 foreign and local lenders, including U.S. Citibank and
British Standard Chartered Bank, as well as South Korea's Shinhan Bank and Korea
Exchange Bank.
