Supreme Court Orders NH Investment to Pay 7.5 Billion Won to Ottogi... 'Optimus Fund Mis-selling' Confirmed

Ottogi Invested 15 Billion Won Before Redemption Suspension

Lawsuit Filed for Contract Cancellation and Damages

NH Investment & Securities, which sold the Optimus Fund that triggered a suspension of redemptions worth over 100 billion won, has been ordered by the Supreme Court to compensate Ottogi, an investor, with approximately 7.5 billion won.

Supreme Court in Seocho-gu, Seoul. Photo by Yonhap News

According to legal sources on May 20, the Supreme Court (Presiding Justice Oh Seokjun) recently upheld the lower court's ruling that partially sided with Ottogi in a lawsuit against NH Investment & Securities for the return of unjust enrichment.

Previously, Ottogi, following the recommendation of NH Investment & Securities, invested 15 billion won in the Optimus Fund on February 25, 2020. While the fund was initially promoted as investing in stable public institution receivables, it was later revealed that most of the investment was allocated to high-risk assets, which led to a large-scale suspension of redemptions.

As a result, Ottogi filed a primary claim seeking cancellation of the contract due to mistake and the return of unjust enrichment, and a secondary, alternative claim for damages due to breach of investor protection obligations under the Capital Markets Act.

The courts of first and second instance dismissed Ottogi's primary claim, stating that "there is no present benefit." However, they accepted the alternative claim on the grounds of breach of explanation obligations. The courts concluded that NH Investment & Securities failed to fulfill its investor protection obligations by not adequately explaining the risks. Regarding the amount of compensation, the first trial ordered payment of approximately 15.5 billion won. The appellate court, however, limited NH Investment & Securities' liability to 60% in consideration of various factors, and ordered compensation of only 7,549,380,000 won.

The Supreme Court also found no legal errors in the lower court's judgment and dismissed both parties' appeals. The Supreme Court pointed out, "The investment prospectus included content that cast significant doubts on the basic profit structure or investment targets proposed by Optimus Asset Management, and NH Investment & Securities appears to have been able to recognize this, yet recommended the investment without sufficient review."

The court further stated, "By failing to adequately explain the structure, risks, and profit realization potential of the fund, NH Investment & Securities violated its investor protection obligations," and affirmed the lower court's finding of liability for damages and the 60% liability limitation, thereby finalizing the ruling.

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