Securities Class Action Suit on Korea Investment and Securities-issued ELS no. 289

   Hit. 289

On October 3, 2009, 23 investors who had joined in “Korea Investment & Securities Rich Dad ELS No. 289” filed a suit with the Financial Grievance Mediation of the Financial Supervisory Service against Korea Investment & Securities, requesting for the due principal and interest, totaling 1.6 billion won. On August 30th, the injured investors sent an official letter demanding payment of the due principal and interest (128.6% of the initial investment), as the concerned ELS has met the conditions of payment. This request was rejected by the company. Then, the investors alleged that the Korea Investment & Securities had purposely adjusted the stock prices of KB Finance (underlying asset of the ELS) around the date of maturity price determination, artificially interrupting the achievement of the maturity payment conditions. Investors applied for the Financial Grievance Mediation, asserting that the company sold great amounts of the KB Finance stocks, to lower the price of the underlying stock, avoiding having to pay the investors. Thus, the Financial Supervisory Commission proposed a mediation plan, insisting the securities company to pay 50% of the loss of the principal. This proposal, however, was rejected by the securities company, and the action is once again under way.

Distribution of Compensation

The distribution payment was completed from May 29th to May 30th, 2018 after winning the securities-related class action. Those who are plaintiffs of Korea Investment & Securities ELS No. 289 Securities-related class action, and reported the rights, should check the deposit status of the bank account designated at the time you reported the rights. And please contact our office if there are any problems.

Significance of this Case

This is the first confirmed winning case under the Securities-Related Class Action Act, which went into effect on January 1, 2005. This case is the proof that the class action system modeled after the U.S.-style class action system can take effect smoothly under the Korea's judicial system. In addition, it will bring positive impact on discussions regarding expansion of applicable areas of class action suits.