Securities Firms with Incomplete Sales of Lime Fund, Related Parties Face 'Severe Disciplinary Actions'

Internal Disciplinary Actions at Sales Company 2 Years and 6 Months After Lime Scandal
Sales Staff Dismissed and Suspended

[Asia Economy Reporter Hwang Junho] Daishin Securities has taken internal disciplinary action 2 years and 6 months after the occurrence of the ‘Lime Incident.’ This is the first time that internal personnel disciplinary actions by a sales company have been made public.

According to the financial investment industry on the 27th, Daishin Securities disciplined 13 personnel related to the Lime Incident on the 26th.

First, severe disciplinary actions were taken against employees belonging to the Banpo WM (Wealth Management) Center who concealed the possibility of losses in Lime Asset Management funds and sold them incompletely. Mr. A, the former head of the Banpo WM Center, who was sentenced to prison for selling Lime funds to about 470 people while hiding the possibility of losses, was dismissed. Seven sales staff who directly sold the funds along with Mr. A received a three-month suspension. Including the suspension period, they will undergo a total of nine months of self-reflection. Daishin Securities has prepared a separate space within its training center located in Wirye-dong, Seoul, to accommodate them. The Banpo WM Center, which was the hotbed of incomplete sales of Lime funds, was closed on December 17 last year following the authorities’ order to shut down the branch. Others involved in incomplete sales received salary reductions ranging from one to three months.

Next, those who indirectly contributed to incomplete sales were also disciplined. Mr. B, the former head of the Customer Asset Headquarters who approved the sale of Lime products and prepared inappropriate explanatory materials, received a reprimand. Executives in the risk management department also received reprimands for failure in internal control.

This action was taken after the Financial Supervisory Service (FSS) demanded personnel disciplinary measures for incomplete sales of Lime funds on December 3 last year. The FSS confirmed disciplinary actions for 9 out of the 13 individuals and allowed Daishin Securities to autonomously handle the remaining 4. Daishin Securities stated, "We held a personnel committee after the authorities’ decision to finalize these disciplinary actions." Actions must be taken within two months after receiving the authorities’ decision. It is highly likely that other securities firms besides Daishin Securities have also implemented measures. The authorities plan to conduct disciplinary reviews for CEOs who neglected internal controls this year.

Daishin Securities sold about 1.176 trillion KRW worth of Lime funds until the end of July last year, before the Lime redemption suspension incident broke out in October last year. This is the largest scale among banks and securities firms, exceeding 20% of the Lime fund sales balance (5.7 trillion KRW).

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