Financial regulator finds more alleged law violations of asset management firms behind massive fraud scandal

The Korea Times

The Korea Times

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Sun, December 3, 2023 | 19:38

Companies

Financial regulator finds more alleged law violations of asset management firms behind massive fraud scandal

Posted : 2023-08-24 11:32

Updated : 2023-08-24 11:32

The financial fraud scandal involving Lime Asset Management is illustrated in this image. Yonhap

Korea's financial regulator said Thursday it has confirmed additional alleged law violations of asset management companies that had been at the center of a massive financial fraud scandal.

The Financial Supervisory Service (FSS) said it has conducted additional investigation into Lime Asset Management, Optimus Asset Management and Discovery Asset Management that were found in recent years to have sold fraudulent funds and caused huge losses to investors.

Lime is newly suspected of covering up the investment losses of four of its funds by dispersing the losses to other funds in 2019. Five companies Lime had invested in are also accused of embezzlement of a combined 200 billion won ($150.8 million) of company funds from 2017 to 2022.

The FSS also suspects an executive at Optimus, whose identity has been withheld, bribed a high-ranking official of an unidentified public institution in exchange for receiving 106 billion won worth of investment in its fund in 2016.

An unidentified executive of a special purpose company (SPC), into which Optimus invested, has been found to have used 1.2 billion won for personal purposes after withdrawing 1.5 billion won from Optimus' fund money, which the SPC had been holding from 2018 to 2019, according to the FSS.

An unidentified executive of a special purpose company (SPC) invested by Optimus has been found to have used 1.2 billion won for personal purposes after withdrawing 1.5 billion won from Optimus' fund money, which the SPC had been holding from 2018 to 2019, according to the FSS.

Other former Optimus executives are also accused of embezzlement and unfair transactions.

The FSS also said Discovery is suspected of falsely raising investment for new funds for redemption of failed funds in 2019, and four of its executives allegedly used undisclosed information to make unfair profits.

The FSS said it has reported the allegations to investigative authorities and will take punitive actions against them.

Lime and Optimus went bankrupt last year after causing trillions of won worth of financial damage to their investors. (Yonhap)

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