April 24, 2024
Finance
Court orders Deutsche Bank to compensate investors
[THE INVESTOR] A lower court ordered Deutsche Bank on Jan. 20 to compensate investors who suffered losses due to its manipulation of stock prices.
The Seoul Central District Court ordered the Germany-based financial services company to pay a total of 8.55 billion won (US$7.28 million) to six plaintiffs who invested in local equity-linked securities products in 2007.
The plaintiffs invested in Korea Investment & Securities’ ELS products based on shares of KB Kookmin Bank and Samsung Electronics in 2007. Deutsche Bank, which Korea Investment contracted with to hedge the products, lowered KB Kookmin’s stock prices by unloading its shares just before the market closed on the expiry day in August 2009.
The court said the plaintiffs received 74.9 percent of the principle, instead of 128.6 percent which they could have received if the defendant did not manipulate the stock prices, acknowledging the price difference as the damage they suffered.
The ruling marked the first case made under the Securities-Related Class Action Act since the law took effect in 2005. In South Korea, a class action suit can only be filed in securities-related cases.
(theinvestor@heraldcorp.com)
The Seoul Central District Court ordered the Germany-based financial services company to pay a total of 8.55 billion won (US$7.28 million) to six plaintiffs who invested in local equity-linked securities products in 2007.
The plaintiffs invested in Korea Investment & Securities’ ELS products based on shares of KB Kookmin Bank and Samsung Electronics in 2007. Deutsche Bank, which Korea Investment contracted with to hedge the products, lowered KB Kookmin’s stock prices by unloading its shares just before the market closed on the expiry day in August 2009.
The court said the plaintiffs received 74.9 percent of the principle, instead of 128.6 percent which they could have received if the defendant did not manipulate the stock prices, acknowledging the price difference as the damage they suffered.
The ruling marked the first case made under the Securities-Related Class Action Act since the law took effect in 2005. In South Korea, a class action suit can only be filed in securities-related cases.
(theinvestor@heraldcorp.com)
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