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Biz News Korea(Eng)
Investors win first trial of class action suit against Deutsche Bank
- Collected
- 2017.01.20
- Distributed
- 2017.01.23
- Source
- Go Direct
The Seoul Central District Court ruled in favor of six plaintiffs on Friday, obligating the German bank to pay 8.58 billion won ($7.3 million) in damages in the first kind of its case since the Securities-Related Class Action Act was introduced in 2005. If upheld by the top court, other investors that had been burned up to 25 percent in their investment in ELS sold by Korea Investment & Securities Co. in 2007 also would have to be compensated.
The investment product was linked to the performance of underlying shares of KB Kookmin Bank and Samsung Electronics. Deutsche Bank who was responsible for hedging the investment sold large amount of shares in KB Kookmin Bank right before market closing in August 2009 and brought down the stock price below the expiry benchmark to cause 25 percent loss in the principal for the investors in the ELS.
It was the third class action lawsuit related to securities approved by the Supreme Court, following the class action suits brought against construction equipment parts supplier Jinsung T.E.C. and Royal Bank of Canada (RBC) by their shareholders. Jinsung T.E.C. reached out-of-court settlement with shareholders. The first trial on the RBC suit is in motion.
By Lee Hyun-jung
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