SEOUL– South Korea’s financial regulator decided Wednesday to take punitive actions against Shinhan Bank for misselling of funds run by now-defunct Lime Asset Management.
The Financial Services Commission (FSC) said it has decided to suspend the bank from selling new private equity fund products for three months and impose a fine of 5.7 billion won (US$4.4 million) for its violation of the capital market act.
In a major hedge fund fiasco, Lime Asset, once the nation’s biggest hedge fund, was accused of selling and running fraudulent financial products and covering up massive investment losses.
The botched investment caused investors to incur heavy losses as it halted withdrawals of funds worth some 1.6 trillion won in 2019.
Shinhan Bank sold 277 billion won worth of Lime funds, while another major lender, Woori Bank, also sold the funds worth 358 billion won.
Source: Yonhap News Agency