Top court orders Daewoo Securities to compensate for price rigging

SEOUL, March 7 (Yonhap) -- The Supreme Court ordered the country's second-largest brokerage house Daewoo Securities Co. to compensate its investors for manipulating stock prices to prevent them from earning profit, court records showed Monday.

The eight plaintiffs invested a total of 236 million won (US$196,000) in 2005 to buy equity-linked securities (ELS) designed to track Samsung SDI Co., the battery and chemical arm of South Korea's top conglomerate Samsung Group.

An ELS is structured to track the performance of underlying assets such as an individual stock and an index, not guaranteeing the principle as investors prefer instruments that promise higher yields.

Right before paying the profits, the securities company massively sold the chemical company's common shares to deter the investors from meeting the terms of repayment.

The court, upholding a lower court's ruling, ordered the brokerage house to compensate some 127 million won to the plaintiffs.

In May 2015, the same court ruled in favor of three others who suffered losses for the same reasons, saying the company neglected its duty to protect its investors.

scaaet@yna.co.kr
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