"Daishin Securities Fined 200 Million Won in First Trial for Poor Management of Lime Fund Sales"

[Asia Economy Reporter Hwang Seoyul] Daishin Securities was sentenced to a fine in the first trial for negligence in the duty of management and supervision of employees who sold Lime Asset Management (Lime) funds.

On the 14th, Judge Park Yeji of the Criminal Division 7 of the Seoul Southern District Court sentenced Daishin Securities to a fine of 200 million won for violating the Capital Markets and Financial Investment Business Act. The court pointed out, "(Daishin Securities) failed to establish internal control standards required of a major securities firm and thus failed to manage Jang Mo and others," adding, "Moreover, the sales profits were substantial, many victims suffered significant damages, and it had a negative impact on the capital market."

However, the court stated the sentencing reasons, considering "Daishin Securities' efforts to strengthen management and supervision by establishing internal control standards after the incident, and the fact that they reached agreements with investors and paid compensation."

Previously, the prosecution indicted Jang Mo, former head of Daishin Securities' Banpo WM Center, for selling Lime funds worth approximately 200 billion won to 470 victims between 2017 and 2019 by falsely explaining the rate of return while concealing the possibility of losses. In December 2020, Jang's sentence of two years imprisonment and a fine of 200 million won was confirmed by the Supreme Court.

Subsequently, the prosecution indicted Daishin Securities for negligence in the duty of management and supervision over Jang under the principle of vicarious liability.

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