Financial Supervisory Service Conducts On-Site Inspection Related to Incomplete Sales of Funds at Hi Investment & Securities
[Asia Economy Reporter Minji Lee] The Financial Supervisory Service (FSS) will conduct an on-site inspection of Hi Investment & Securities next week regarding incomplete fund sales. The investigation will cover funds sold so far, including the 'Optimus Fund,' which shocked the market with a redemption suspension crisis worth 1.6 trillion KRW.
According to the FSS and the financial investment industry on the 18th, the FSS will begin a surprise on-site inspection of Hi Investment & Securities for about a week starting early next week. This inspection follows FSS Chairman Lee Bok-hyun's announcement shortly after his inauguration that a full investigation would be conducted on private equity funds sold by securities firms to prevent fund insolvency. The FSS is expected to investigate whether there was any improper solicitation during the fund sales process, whether the obligation to explain was fulfilled, and whether all FSS regulations were followed.
The on-site inspection target includes the Optimus Fund, which caused a large-scale redemption suspension crisis. Hi Investment & Securities was one of the sellers of the Optimus Fund and had sold the Optimus Fund worth 30 billion KRW to the corporation HLB. Currently, HLB has filed a lawsuit against Hi Investment & Securities at the Seoul Southern District Court, claiming the return of unjust profits amounting to 30 billion KRW.
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A representative of Hi Investment & Securities stated, “We are conducting a full investigation of funds sold since 2008, including the Optimus Fund,” and added, “It seems to be part of the FSS’s inspections targeting securities firms that sold funds with redemption suspensions.”
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