FSS Disciplines 28 Woori Bank Employees Over 'Lime Fund Scandal'

[Asia Economy Reporter Song Hwajeong] The Financial Supervisory Service (FSS) has imposed disciplinary actions, including suspension, on Woori Bank employees in connection with the suspension of redemptions of Lime Asset Management's private equity funds.

According to the FSS's disciplinary disclosure on the 15th, on the 9th, the FSS sanctioned 28 Woori Bank employees for incomplete sales of private equity funds and other financial investment products, as well as violations of the obligation to verify real names in financial transactions related to the Lime fund incident. Among them, 22 received warnings, one retired employee was suspended for three months, one retired employee received a three-month pay cut, one retired employee was notified of illegal conduct, and three others received three-month pay cuts.

According to the FSS disciplinary proposal, Woori Bank knew that the maturity repayment of the Lime fund it sold was uncertain but did not inform its branches and failed to take protective measures for investors. It was also found that the bank improperly solicited investors by misleading them to believe the fund invested in safe assets such as A-rated bonds with fixed interest and would be automatically repaid at maturity, despite the fund investing in high credit risk assets and having uncertain maturity repayment.

From June 2017 to April 2019, 82 Woori Bank branches sold 114 cases worth 72.1 billion KRW of private equity funds and other products to 109 general investors, engaging in incomplete sales by failing to provide proper explanations.

At some Woori Bank branches, it was revealed that from April 2018 to 2019, text messages sent seven times to 85 customers contained misleading expressions such as "Principal preservation, subscription period 1 year 6 months, 2.02% profit secured" and "Principal preserved with higher returns than regular deposits."

Additionally, 23 Woori Bank branches were found to have violated the real-name verification obligation by selling 30 financial investment products under 28 different names from July 2017 to April 2019.

In April last year, through the disciplinary review committee, the FSS judged that Woori Bank had incompletely sold Lime funds to customers and forwarded proposals for partial suspension of Woori Bank's operations and a reprimand warning for Sohn Tae-seung, Chairman of Woori Financial Group (former Woori Bank CEO), to the Financial Services Commission. On the 9th, at a regular meeting, the Financial Services Commission decided on a severe disciplinary action equivalent to a reprimand warning for Sohn Tae-seung and a three-month suspension on new sales of private equity funds.

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