Prosecutors Indict Daishin Securities and Shinhan Investment Corp. for Incomplete Sale of Lime Fund

'Negligence in Supervision' Recognized Under Dual Punishment Rule... Investigations Planned for Other Financial Institutions Too

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[Asia Economy Reporter Yoo Byung-don] The prosecution investigating the 'Lime Asset Management Scandal,' which caused damages worth about 1.6 trillion KRW, has indicted Daishin Securities and Shinhan Financial Investment, the major distributors of Lime funds.

The Criminal Division 6 of the Seoul Southern District Prosecutors' Office (Chief Prosecutor Kim Rak-hyun) announced on the 22nd that Daishin Securities and Shinhan Financial Investment were indicted under the joint penalty provisions of the Act on Capital Market and Financial Investment Business for fraudulent unfair trading and improper solicitation.

The Capital Market Act stipulates that if an employee of a corporation commits illegal acts such as fraudulent unfair trading in relation to their personal duties, not only the individual is punished, but the corporation is also subject to fines under the relevant provisions.

Daishin Securities is suspected of negligence in the duty of care and supervision after Jang, former head of Banpo WM Center, falsely explained important fund details such as returns and risks, leading 470 investors to subscribe to 17 funds (total investment amount approximately 200 billion KRW).

Shinhan Financial Investment is also suspected of negligence in the duty of care and supervision regarding the incomplete sale of funds by Lim, former head of Shinhan Financial Investment PBS Headquarters.

Jang, the former center head, and Lim, the former headquarters chief, were previously indicted for violating the Capital Market Act and other charges, receiving prison sentences of 2 years and 8 years respectively in the first trial, and the appeals are currently underway.

The prosecution stated, "We plan to continue investigating additional charges related to the design and operation of Lime funds as well as illegal activities by other financial institutions."

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