Victims of the 'Dongyang Group Incident' Lose Again in Second Trial of 100 Billion Won Class Action Lawsuit

About 1,200 investors who suffered losses after investing in the old Dongyang Group corporate bonds filed a collective lawsuit worth over 100 billion won against Dongyang Securities (now Yuanta Securities), but they lost again in the second trial.

According to the legal community on the 29th, the Seoul High Court Civil Division 12-3 (Presiding Judges Park Hyung-joon, Yoon Jong-gu, Kwon Soon-hyung) ruled on the 24th to dismiss the appeal of 1,246 investors who filed a securities-related collective lawsuit against Dongyang Securities, upholding the first trial’s decision in favor of the defendant.

The court stated, "This case has taken a long time from the first trial to the current appeal," and added, "After examining the evidence and arguments regarding the plaintiffs’ claim that the crisis was concealed, we find that there is a considerable context in which a reasonable investor could have operated," thereby rejecting the plaintiffs’ appeal.

The Dongyang Group incident refers to the 2013 case where Dongyang Group concealed the risk of bankruptcy and issued large-scale corporate bonds and commercial papers (CP), causing losses to investors. It is known that about 40,000 investors suffered damages amounting to 1.7 trillion won.

The victims filed a collective lawsuit in June 2014, claiming that Dongyang Securities and others sold corporate bonds using fraudulent means and failed to disclose important matters in the securities registration statement and investment prospectus. Unlike ordinary lawsuits, securities-related collective lawsuits require court approval to be filed, and if the plaintiffs win, the rights of other investors who did not file lawsuits are also protected.

Meanwhile, Hyun Jeon Dongyang, former chairman of Dongyang Group, was indicted on charges including fraud under the Act on the Aggravated Punishment of Specific Economic Crimes related to this case. In 2015, the Supreme Court confirmed a seven-year prison sentence, and he was released upon completion of his term in 2021.

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