Individual investors who suffered losses from bonds issued by JTBC and JoongAng Ilbo have formed a joint legal team to initiate legal action. The team is urging the Financial Supervisory Service (FSS) to expand its investigation to include all financial institutions involved in the issuance and distribution processes.
On July 9, the legal team representing the victims of JoongAng Group bond investments announced in a press release that they have begun collective action on behalf of those affected by the bonds and short-term electronic bonds issued by JTBC and JoongAng Ilbo. According to the team, there are currently 286 victims who have entrusted their cases, with the total losses exceeding 30 billion won.
The joint legal team consists of eight lawyers specializing in capital market disputes, including those from Lee Bok-hyun Law Office and Changcheon Law Firm. The advisory group includes Dan Seong-han, a former head of the financial and securities crime joint investigation team at the Southern District Prosecutor's Office, and Yoo Min-jong, a former head of the asset recovery department at the Central District Prosecutor's Office.
The legal team claims that individual investors, who found it difficult to fully understand the financial situation of the JoongAng Group affiliates, trusted the financial institutions that issued, sold, and distributed the bonds, leading to their losses. They also stated, "Bonds were sold to individuals right up until the application for rehabilitation proceedings, and there was an information asymmetry during this process."
Furthermore, the team is calling for an expansion of the FSS investigation. They argue that the ongoing investigation should not be limited to Shinhan Investment Corp. and Kiwoom Securities but should also include investment advisory firms and other securities companies involved in the sale and brokerage of the bonds. The team believes that while a significant portion of the issuance was formally allocated to institutions, it is likely that these underwriters were aware that the bonds were actually sold to individual investors.
The legal team referenced a recent Supreme Court ruling that broadly recognized the information provision obligations of issuing and distributing financial institutions as a basis for their case. This ruling determined that these institutions have a duty to accurately produce and provide product information, and that certain responsibilities may also be recognized for market investors who did not directly solicit investments.
Lee Bok-hyun, a lawyer who previously served as the head of the FSS under the Yoon Suk-yeol administration, stated, "This case resembles a financial fraud scheme involving a rollover of maturity extensions affecting numerous victims," adding that his experience in protecting victims during his public service could aid in resolving the case.
* This article has been translated by AI.
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