Regulator finalizes 370 bln-won penalties on banks, securities firms over mis-selling of HK-tied derivatives
SEOUL, Nov. 4 (Yonhap) -- Seven banks and six securities firms were slapped with...
Seoul's financial regulator finalized 370 billion won in penalties against seven banks and six securities firms for mis-selling equity-linked securities (ELS) products tied to Hong Kong's H Index. This fine is significantly less than the initial 1.4 trillion-won penalty on the five lenders - KB Kookmin Bank, Shinhan Bank, Hana Bank, NH Nonghyup, and SC Korea - who had already compensated customers for the mishap.
The regulator reviewed legal issues before settling on the 370 billion won. The firms sold a combined 19.3 trillion won worth of ELS products since 2021. KB Kookmin Bank's ELS sales amounted to 8.2 trillion won, the highest among the firms. The penalties come as Hong Kong's H Index plummeted in early 2024, causing significant losses for ELS buyers.
The regulator ordered the banks to reimburse part of the customers' losses, citing insufficient disclosure of product details, including terms and risks, to consumers.
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