Former Daishin Securities Center Head Sentenced to 2 Years in First Trial for Large-Scale Lime Fund Sales

Court: "Serious Undermining of Fairness and Trust in the Capital Market"

[Asia Economy Reporter Yoo Byung-don] Jang, the former head of Daishin Securities Banpo WM Center, who was prosecuted on charges of large-scale sales of funds related to the Lime Asset Management scandal causing damage worth about 1.6 trillion KRW, was sentenced to imprisonment in the first trial.

The Criminal Division 13 of the Seoul Southern District Court (Chief Judge Shin Hyuk-jae) sentenced Jang, who was detained and indicted on charges of violating the Capital Markets and Financial Investment Business Act, and the Act on the Aggravated Punishment of Specific Economic Crimes (illegal private financing mediation, bribery, etc.), to two years in prison on the 2nd.

The court stated, “The defendant, while working as the head of Daishin Securities Banpo WM Center, encouraged customers to subscribe to Lime Asset Management funds, which ultimately caused huge losses,” and added, “The defendant’s crime seriously damages the fairness and reliability of the capital market, and the nature of the crime is bad.” Furthermore, “Moreover, despite suspicions of fund insolvency being raised in the media, the defendant denied the facts to investors, increasing the scale of losses,” and “The victims want severe punishment for the defendant.” However, the court took into consideration as favorable circumstances that Jang was a first-time offender and that it is difficult to see that the investors’ Lime fund investments were entirely made by Jang.

Earlier, at the sentencing hearing held on the 3rd of last month, the prosecution requested the court to sentence Jang to 10 years in prison and a fine of 500 million KRW. At that time, the prosecution stated, “Even after recognizing Lime’s problems, Jang reassured customers through group text messages that ‘there is no problem with the fund,’” and “In text messages exchanged with Lime, Jang said, ‘I will absolutely block redemptions,’” explaining the reason for the prosecution’s request.

Jang was detained and indicted on charges of selling 248 billion KRW worth of funds while hiding the possibility of losses by emphasizing an unconfirmed annual yield rate with terms such as ‘8% fixed annual return’ and ‘8% fixed interest rate per year.’

Previously, Lim, the former head of Shinhan Financial Investment PBS Business Division, who was prosecuted on charges including fraud under the Act on the Aggravated Punishment of Specific Economic Crimes for continuing to sell funds without disclosing the insolvency related to the Lime scandal, was sentenced to 8 years in prison and fined 300 million KRW in the first trial on September 1. Lim was also charged with selling fund products worth 48 billion KRW to general investors through Shinhan Financial Investment without disclosing the fact that insolvency occurred in overseas funds.

The court also sentenced Shim, the former team leader of Shinhan Financial Investment, who was indicted on charges of receiving bribes such as money and goods from the former vice chairman of Lead, a KOSDAQ-listed company involved with Lime funds, to 3 years in prison and a fine of 300 million KRW in the first trial in October.

This content was produced with the assistance of AI translation services.