A Seoul court ordered a local asset management firm and a bank to compensate 6.1 billion won, or 5.25 million U.S. dollars to over 200 investors to compensate for their losses, court officials said Monday.
According to the plaintiffs, they lost their money invested in an equity-linked fund (ELF) managed by Woori Asset Management and sold by Hana
bank as the financial firms invested in an over-the- counter derivative issued by the now-defunct Lehman Brothers, not in BNP Paribas as stated in the contract.
The court favored the plaintiffs in its ruling, saying "the investors have suffered losses because the asset management firm changed the
derivative operating company unilaterally."
"The firms (Woori and Hana) are responsible for the losses as they breached the contract agreed with the investors," it added.
The ELF fund had absorbed 28.4 billion won from some 980 investors in 2007.
The case, unlike precedent cases that recognized the fault of asset managers up to only 50 percent, marks the first time that an asset manager was held fully responsible for a failed investment.
The ruling is likely to affect two other pending suits against Woori's fund, as well as other similar cases, South Korea's Yonhap News Agency reported.