{"id":792,"date":"2026-04-30T09:15:38","date_gmt":"2026-04-30T09:15:38","guid":{"rendered":"https:\/\/atlaw.kr\/en-blog\/?p=792"},"modified":"2026-05-03T08:30:55","modified_gmt":"2026-05-03T08:30:55","slug":"elderly-investor-private-fund-damages-south-korea","status":"publish","type":"post","link":"https:\/\/atlaw.kr\/en-blog\/elderly-investor-private-fund-damages-south-korea\/","title":{"rendered":"Elderly Private Fund Damages in South Korea: Court Ruling"},"content":{"rendered":"<p><!-- ATLAS_HREFLANG_START --><link rel=\"alternate\" hreflang=\"ko\" href=\"https:\/\/atlaw.kr\/kr-blog\/elderly-private-fund-suitability-principle-kr\/\" \/><link rel=\"alternate\" hreflang=\"en\" href=\"https:\/\/atlaw.kr\/en-blog\/elderly-investor-private-fund-damages-south-korea\/\" \/><link rel=\"alternate\" hreflang=\"x-default\" href=\"https:\/\/atlaw.kr\/kr-blog\/elderly-private-fund-suitability-principle-kr\/\" \/><!-- ATLAS_HREFLANG_END --><br \/>\n<!-- Article Schema --><br \/>\n<script type=\"application\/ld+json\">{\"@context\": \"https:\/\/schema.org\", \"@type\": \"Article\", \"headline\": \"Selling Private Equity Funds to Elderly Investors in South Korea: Seoul Northern District Court 2024 Gadan 161390 Ruling Analysis | Atlas Legal\", \"description\": \"A South Korean court ordered a securities firm to compensate an elderly housewife in full for losses on a high-risk private equity fund. Atlas Legal analyzes the suitability principle, duty to explain, and rejection of comparative negligence under South Korean Capital Markets Act.\", \"author\": {\"@type\": \"Person\", \"name\": \"Taejin Kim\", \"jobTitle\": \"Managing Partner\", \"worksFor\": {\"@type\": \"LegalService\", \"name\": \"Atlas Legal\", \"url\": \"https:\/\/atlaw.kr\", \"address\": {\"@type\": \"PostalAddress\", \"addressLocality\": \"Incheon\", \"addressRegion\": \"Songdo\", \"addressCountry\": \"KR\"}}, \"@id\": \"https:\/\/atlaw.kr\/en\/taejin-kim-en\/#person\"}, \"publisher\": {\"@type\": \"Organization\", \"name\": \"Atlas Legal\", \"url\": \"https:\/\/atlaw.kr\", \"@id\": \"https:\/\/atlaw.kr\/#legalservice\"}, \"datePublished\": \"2026-04-30\", \"dateModified\": \"2026-04-30\", \"mainEntityOfPage\": {\"@type\": \"WebPage\"}, \"@id\": \"https:\/\/atlaw.kr\/en-blog\/elderly-investor-private-fund-damages-south-korea#article\"}<\/script><\/p>\n<p><!-- FAQ Schema --><br \/>\n<script type=\"application\/ld+json\">{\"@context\": \"https:\/\/schema.org\", \"@type\": \"FAQPage\", \"mainEntity\": [{\"@type\": \"Question\", \"name\": \"Why does South Korean law impose stricter duties on banks affiliated with securities firms?\", \"acceptedAnswer\": {\"@type\": \"Answer\", \"text\": \"Under South Korean Supreme Court precedent, banks carry greater public trust than other financial institutions, so their recommendations have a stronger influence on customer decisions. The Seoul Northern District Court extended this enhanced customer protection duty to securities firms operating through bank-integrated branches under unified wealth management strategies, recognizing the structural risk that customers rely on bank credibility when accepting investment recommendations from affiliated brokers.\"}}, {\"@type\": \"Question\", \"name\": \"Can a securities firm in South Korea rely on a 24-month-old investor information form for new high-risk product recommendations?\", \"acceptedAnswer\": {\"@type\": \"Answer\", \"text\": \"No. The Capital Markets Act in South Korea requires current information at the time of recommendation, not merely information within an internally fixed expiration period. The Seoul Northern District Court held that a self-imposed 24-month validity period had no rational basis and could undermine the statutory information-gathering duty. Where the customer has experienced significant changes (death of spouse, family illness, asset disposal), updated information must be obtained through fresh interviews.\"}}, {\"@type\": \"Question\", \"name\": \"Are written confirmations and signatures sufficient to prove the duty to explain in South Korean financial litigation?\", \"acceptedAnswer\": {\"@type\": \"Answer\", \"text\": \"Not automatically. The court rejected the firm's reliance on signed forms because the language used was technical jargon difficult for elderly investors to understand, the forms were pre-prepared by the firm with handwritten content following its instructions, and required enhanced procedures (recording, video, written records) for elderly investors were not followed. Substantive understanding by the actual investor, not formal compliance with paper procedures, is the test.\"}}, {\"@type\": \"Question\", \"name\": \"How is comparative negligence treated when the victim is an elderly investor in South Korea?\", \"acceptedAnswer\": {\"@type\": \"Answer\", \"text\": \"The Seoul Northern District Court rejected comparative negligence entirely. The court reasoned that the principle of self-responsibility presupposes the investor's capacity to understand transaction content, risks, and profit structure. Where the investor lacks such capacity (as with elderly housewives unfamiliar with complex financial structures), demanding due care that requires the very capacity she lacks is logically contradictory and would allow the financial institution to mitigate liability through its own breach of duty.\"}}, {\"@type\": \"Question\", \"name\": \"When does the limitation period for delay damages begin in private equity fund loss cases under South Korean law?\", \"acceptedAnswer\": {\"@type\": \"Answer\", \"text\": \"Under Korean Supreme Court precedent (2018 Da 212272), delay damages run from the date when the unrecovered loss is finalized, not from the date when the management firm first requests maturity extension. In this case, that date was the maturity date when the fund was officially designated as non-redeemable (October 31, 2024).\"}}, {\"@type\": \"Question\", \"name\": \"Are internal sales policies of securities firms binding on the suitability principle determination in South Korea?\", \"acceptedAnswer\": {\"@type\": \"Answer\", \"text\": \"No. The court held that industry association standards and firm-level sales policies are merely self-regulatory norms that concretize the statutory suitability principle but do not have force of law. Formal compliance with these self-imposed rules does not satisfy the Capital Markets Act's suitability principle. Conversely, violation of such self-regulation strongly suggests illegality, but compliance does not create immunity. A regulated party cannot diminish its own statutory duty through self-set standards.\"}}], \"@id\": \"https:\/\/atlaw.kr\/en-blog\/elderly-investor-private-fund-damages-south-korea#faq\"}<\/script><\/p>\n<p><!-- LocalBusiness Schema --><br \/>\n<script type=\"application\/ld+json\">{\"@context\": \"https:\/\/schema.org\", \"@type\": \"LegalService\", \"name\": \"Atlas Legal\", \"image\": \"https:\/\/atlaw.kr\/logo.png\", \"url\": \"https:\/\/atlaw.kr\", \"telephone\": \"+82-32-864-8300\", \"address\": {\"@type\": \"PostalAddress\", \"streetAddress\": \"323 Incheon Tower-daero, B-2901 (Songdo-dong, Centroad)\", \"addressLocality\": \"Incheon\", \"addressRegion\": \"Yeonsu-gu\", \"postalCode\": \"21998\", \"addressCountry\": \"KR\"}, \"priceRange\": \"$$\", \"openingHoursSpecification\": {\"@type\": \"OpeningHoursSpecification\", \"dayOfWeek\": [\"Monday\", \"Tuesday\", \"Wednesday\", \"Thursday\", \"Friday\"], \"opens\": \"09:00\", \"closes\": \"18:00\"}, \"@id\": \"https:\/\/atlaw.kr\/#legalservice\"}<\/script><\/p>\n<style>body { font-family: Georgia, serif; line-height: 1.6; max-width: 1000px; margin: 0 auto; padding: 20px; background-color: #f9f9f9; } .content-container { background-color: white; padding: 20px; margin: 0; } h2 { font-size: 22px; color: #2c3e50; margin-top: 30px; margin-bottom: 10px; } h3 { font-size: 20px; color: #34495e; margin-top: 20px; margin-bottom: 10px; } p, li { font-size: 18px; color: #333; margin-bottom: 10px; margin-top: 0; } ul, ol { padding-left: 25px; margin: 10px 0; } li { margin-bottom: 5px; } table { width: 100%; border-collapse: collapse; margin: 15px 0; } th, td { border: 1px solid #ddd; padding: 10px; text-align: left; font-size: 16px; } th { background-color: #f5f5f5; font-weight: bold; } .toc { padding: 15px; border-radius: 0; margin-bottom: 20px; background-color: #f5f5f5; } .toc h2 { font-size: 20px; margin-top: 0; margin-bottom: 10px; } .toc ul { list-style-type: none; padding-left: 0; margin: 0; } .toc ul li { margin-bottom: 5px; } .toc a { text-decoration: none !important; color: #3498db; border-bottom: none !important; 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margin: 0; line-height: 1.7; white-space: pre-line; } .statute-box .statute-text + .statute-title { margin-top: 12px; } .statute-box .statute-source-title { font-weight: bold; color: #666; font-size: 14px; margin-top: 14px; margin-bottom: 4px; display: block; } .statute-box .statute-source-text { color: #777; font-size: 14px; margin: 0; line-height: 1.5; font-style: italic; } .geo-box { background-color: #f5f5f5; padding: 18px 20px; border-radius: 0; margin: 20px 0; border-left: 2px solid #722f37; } .geo-box h3 { margin-top: 0; font-size: 19px; color: #2c3e50; } .geo-box p { line-height: 1.7; color: #444; margin-bottom: 8px; } br { display: none; } strong { font-weight: bold; } @media (max-width: 768px) { body { padding: 10px; } .content-container { padding: 15px; } h2 { font-size: 18px; } h3 { font-size: 17px; } p, li { font-size: 16px; } th, td { font-size: 14px; padding: 8px; } .statute-box { padding: 14px 16px; font-size: 14px; } .statute-box .statute-title { font-size: 14px; } .statute-box .statute-text { font-size: 14px; } .statute-box .statute-source-title { font-size: 13px; } .statute-box .statute-source-text { font-size: 13px; } } .site-container, .content-area, .entry-content { padding: 0; margin: 0; } .entry-content > *:first-child { margin-top: 0 !important; } .entry-content { margin-top: 0 !important; } .kb-row-container, .kb-column-container { margin: 0; padding: 0; }<\/style>\n<div class=\"content-container\">\n<div class=\"toc\">\n<h2>Table of Contents<\/h2>\n<ul>\n<li><a href=\"#section1\">1. The Bottom Line: Full Compensation Without Comparative Negligence<\/a><\/li>\n<li><a href=\"#section2\">2. Damage Calculation Under South Korean Capital Markets Act<\/a><\/li>\n<li><a href=\"#section3\">3. Why Bank-Affiliated Securities Firms Bear Heavier Duties in South Korea<\/a><\/li>\n<li><a href=\"#section4\">4. Self-Regulation Cannot Substitute for Statutory Duties<\/a><\/li>\n<li><a href=\"#section5\">5. Why Private Equity Funds Are Generally Unsuitable for Elderly Investors in South Korea<\/a><\/li>\n<li><a href=\"#section6\">6. The Reality Behind &#8220;Signed and Acknowledged&#8221; Forms<\/a><\/li>\n<li><a href=\"#section7\">7. Investor Information Currency Requirements Under Korean Law<\/a><\/li>\n<li><a href=\"#section8\">8. Practical Implications for Foreign-Invested Companies and Expatriates<\/a><\/li>\n<li><a href=\"#section9\">9. FAQ<\/a><\/li>\n<\/ul>\n<\/div>\n<div class=\"story-hook\">\n<p><strong>Real Case:<\/strong> A 73-year-old housewife in South Korea was introduced by her bank to an affiliated securities firm operating in the same branch. They recommended what they called &#8220;a safe real estate fund.&#8221; She invested approximately KRW 304 million. When maturity arrived, she could not recover her money. The product turned out to be a private equity fund that ordinary investors cannot even purchase. How did the court rule?<\/p>\n<\/div>\n<div class=\"direct-answer\">\n<strong>Direct Answer:<\/strong> On March 10, 2026, the Seoul Northern District Court (Case No. 2024 Gadan 161390) ordered the securities firm to compensate the entire loss of approximately KRW 266 million without any comparative negligence reduction. The court found violations of the suitability principle and the duty to explain under the South Korean Capital Markets Act.\n<\/div>\n<div class=\"story-detail\">\n<h3>Why This Ruling Matters in South Korea<\/h3>\n<p class=\"disclaimer\">\u203b This article is based on Seoul Northern District Court Decision No. 2024 Gadan 161390, with party identifiers anonymized for clarity.<\/p>\n<p>This decision consolidates several recurring issues in elderly investor protection cases under South Korean financial law: enhanced customer protection duties for bank-affiliated securities firms, the unsuitability of private equity products for elderly investors, the limited probative value of internal sales policies, the inadequacy of signed acknowledgment forms, and the rejection of comparative negligence. The ruling marks a significant point in the development of investor protection doctrine in the South Korean financial sector.<\/p>\n<\/div>\n<p><\/p>\n<h2 id=\"section1\">1. The Bottom Line: Full Compensation Without Comparative Negligence<\/h2>\n<p>The Seoul Northern District Court found that the defendant securities firm violated <strong>both the suitability principle (Article 46 of the former Capital Markets Act)<\/strong> and <strong>the duty to explain (Article 47 of the former Capital Markets Act)<\/strong>. The court ordered full compensation of KRW 265,886,649 \u2014 calculated as the principal investment of KRW 304,500,000 minus the interim distributions received of KRW 38,613,351 \u2014 and explicitly rejected any reduction for comparative negligence.<\/p>\n<h3>Core Facts of the Case<\/h3>\n<p>On November 18, 2019, the plaintiff, a 73-year-old housewife with no formal financial education, was solicited at a bank-integrated branch of an affiliated securities firm to invest approximately KRW 304.5 million. The transaction was structured as a specific money trust, but the substance was an investment in beneficial certificates of a <strong>privately offered investment fund (the highest &#8220;Grade 1&#8221; risk rating)<\/strong>.<\/p>\n<p>Key product features were as follows.<\/p>\n<table>\n<tr>\n<th>Feature<\/th>\n<th>Detail<\/th>\n<\/tr>\n<tr>\n<td>Risk Grade<\/td>\n<td>Grade 1 (Very High Risk)<\/td>\n<\/tr>\n<tr>\n<td>Fund Type<\/td>\n<td>Private equity fund (closed-end, no early redemption)<\/td>\n<\/tr>\n<tr>\n<td>Underlying Assets<\/td>\n<td>Four cinema-use real estate properties acquired for total of KRW 48.3 billion<\/td>\n<\/tr>\n<tr>\n<td>Return Mechanism<\/td>\n<td>Lease income plus capital gain on disposal<\/td>\n<\/tr>\n<tr>\n<td>Liquidity<\/td>\n<td>No early redemption permitted<\/td>\n<\/tr>\n<tr>\n<td>Eligibility Threshold<\/td>\n<td>Minimum KRW 300 million per investor (later raised to KRW 500 million)<\/td>\n<\/tr>\n<\/table>\n<p>Due to delays in real estate disposal during the COVID-19 period, the maturity was extended to October 31, 2024, but the underlying properties remained unsold. The fund was eventually <strong>designated as a non-redeemable fund<\/strong>, leaving the plaintiff unable to recover her investment.<\/p>\n<p><\/p>\n<h2 id=\"section2\">2. Damage Calculation Under South Korean Capital Markets Act<\/h2>\n<p>The court applied the statutory damage estimation rule under Article 48(2) of the Capital Markets Act, which presumes the loss to equal the amount paid in less the amount recovered or recoverable.<\/p>\n<div class=\"statute-box\">\n<span class=\"statute-title\">Capital Markets and Financial Investment Business Act, Article 64(1) (Liability for Damages)<\/span><\/p>\n<p class=\"statute-text\">A financial investment business entity that violates statutes, terms and conditions, fund regulations, or investment prospectus, or that neglects its business duties and thereby causes loss to an investor, shall be liable to compensate such loss. (&#8230;)<\/p>\n<p><span class=\"statute-title\">Same Act, Article 48 (Liability for Damages)<\/span><\/p>\n<p class=\"statute-text\">(1) A financial investment business entity that violates Article 19(1) or (3) of the Financial Consumer Protection Act shall be liable to compensate the resulting loss of an ordinary investor.<br \/>\n(2) The amount obtained by subtracting the total amount of money or property recovered or recoverable by the ordinary investor from the disposal of the financial investment product or otherwise, from the total amount of money or property paid or payable for the acquisition of the financial investment product, shall be presumed to be the amount of loss under paragraph (1).<\/p>\n<p><span class=\"statute-source-title\">\u203b Source and Note<\/span><\/p>\n<p class=\"statute-source-text\">Citation from Seoul Northern District Court Decision No. 2024 Gadan 161390 (pp. 36\u201337). The provisions above reflect the current Capital Markets Act effective March 17, 2026 (verified through the Korean Government Legislation Information Center). The damage estimation rule (Article 48(2)) and general liability provision (Article 64(1)) remain substantively unchanged from the version applied in this case. <strong><u>Note that the basis for liability under Article 48(1) was amended on March 24, 2020, transferring the underlying duty from the former Capital Markets Act (former Article 47) to Article 19 of the Financial Consumer Protection Act.<\/u><\/strong> The original trust contract in this case (November 18, 2019) predates that amendment.<\/p>\n<\/div>\n<h3>Calculation Table<\/h3>\n<table>\n<tr>\n<th>Component<\/th>\n<th>Amount (KRW)<\/th>\n<th>Note<\/th>\n<\/tr>\n<tr>\n<td>\u2460 Principal Investment (amount paid)<\/td>\n<td style=\"text-align:right;\">304,500,000<\/td>\n<td>Trust executed November 18, 2019<\/td>\n<\/tr>\n<tr>\n<td>\u2461 Interim Distributions (amount recovered)<\/td>\n<td style=\"text-align:right;\">&#8211; 38,613,351<\/td>\n<td>Distributions actually received during trust period<\/td>\n<\/tr>\n<tr>\n<td><strong>Loss (\u2460 &#8211; \u2461)<\/strong><\/td>\n<td style=\"text-align:right;\"><strong>265,886,649<\/strong><\/td>\n<td>Presumed loss under Article 48(2)<\/td>\n<\/tr>\n<\/table>\n<p>The Court further confirmed that the date of loss occurrence (and thus the starting date for delay damages) is the maturity date when the fund was designated as non-redeemable \u2014 October 31, 2024 \u2014 not the earlier dates when the management firm requested maturity extensions or when the plaintiff consented to such extensions. This follows the Korean Supreme Court precedent that the date of loss occurrence is the date when the unrecovered amount is finalized (Supreme Court Decision 2016 Da 212272, June 15, 2018).<\/p>\n<p><\/p>\n<h2 id=\"section3\">3. Why Bank-Affiliated Securities Firms Bear Heavier Duties in South Korea<\/h2>\n<p>South Korean Supreme Court precedent (Decision 2013 Da 26746, En Banc, September 26, 2013) holds that banks bear heavier customer protection duties than other financial institutions because of their greater public trust. The Seoul Northern District Court extended this principle to securities firms operating through bank-integrated branches as part of unified wealth management strategies.<\/p>\n<h3>The Court&#8217;s Reasoning<\/h3>\n<p>The court identified two structural risks that justify enhanced duties for affiliated securities firms in South Korea:<\/p>\n<p><strong>First, customer reliance on bank credibility.<\/strong> When investment products are recommended through bank-integrated branches following bank staff introductions, the customer&#8217;s decision is heavily influenced by trust in the bank rather than independent evaluation of the securities firm.<\/p>\n<p><strong>Second, conflict of interest between affiliated entities.<\/strong> Within affiliated financial groups, there is an inherent risk that the group&#8217;s interests may be prioritized over those of the individual customer. Furthermore, the affiliated securities firm benefits from the bank&#8217;s credibility in promoting product sales, and must therefore bear duties commensurate with that benefit.<\/p>\n<p>Notably, the original Supreme Court precedent involved corporate customers, but the Seoul Northern District Court emphasized that elderly individual customers&#8217; reliance on their longstanding bank is even greater than that of corporations, justifying even stricter application of enhanced duties in the elderly investor context.<\/p>\n<p><\/p>\n<h2 id=\"section4\">4. Self-Regulation Cannot Substitute for Statutory Duties<\/h2>\n<p>The court held that industry association standards and firm-level sales policies are <strong>self-regulatory norms without force of law<\/strong>. Formal compliance with such self-imposed rules does not satisfy the suitability principle under the Capital Markets Act in South Korea.<\/p>\n<h3>The Court&#8217;s Four-Step Reasoning<\/h3>\n<p>This represents one of the most significant general doctrinal contributions of the ruling.<\/p>\n<p><strong>First, even administrative regulations represent only minimum standards.<\/strong> Even formally binding administrative regulations may set only minimum thresholds for the protection of legal interests; mere formal compliance does not always negate illegality (citing Korean Supreme Court Decisions 2022 Da 210000, 2009 Da 40462, and 2018 Da 234979).<\/p>\n<p><strong>Second, self-regulation is even weaker than law.<\/strong> If even administrative regulations may be insufficient, association- or firm-made self-regulatory norms cannot suffice for compliance with the statutory suitability principle. <strong>Violation of self-regulation strongly suggests illegality, but formal compliance creates no immunity.<\/strong><\/p>\n<p><strong>Third, regulated parties cannot self-exempt through their own standards.<\/strong> Allowing financial institutions to limit their statutory duties through internally adopted standards would invert the regulatory hierarchy.<\/p>\n<p><strong>Fourth, the &#8220;24-month validity period&#8221; lacked rational basis.<\/strong> The defendant&#8217;s self-imposed validity period for investor information forms had no demonstrable connection to ensuring information currency. Permitting formal compliance with such arbitrary periods would allow institutions to extend the period to operationally convenient lengths, effectively nullifying the statutory information-gathering duty.<\/p>\n<p><\/p>\n<h2 id=\"section5\">5. Why Private Equity Funds Are Generally Unsuitable for Elderly Investors in South Korea<\/h2>\n<p>Elderly investors generally have <strong>diminished risk-bearing capacity and reduced ability to comprehend complex financial structures<\/strong>. Private equity funds with atypical structures are generally unsuitable. When recommending such products, financial institutions must carefully evaluate the product&#8217;s nature and the investor&#8217;s specific experience, financial situation, income capacity, risk preference, and cognitive capacity.<\/p>\n<h3>Structural Vulnerabilities of Elderly Investors<\/h3>\n<p>The court summarized the general characteristics of elderly investors as follows:<\/p>\n<ul>\n<li>Often no regular income or income subject to decline<\/li>\n<li>Limited ability to recover from losses through future earning capacity<\/li>\n<li>Reduced cognitive capacity or specialized knowledge to understand complex financial structures<\/li>\n<\/ul>\n<p>The court noted that even before the South Korean Capital Markets Act explicitly listed age as a suitability factor, the following self-regulatory and subsequent statutory frameworks already recognized the protective need for elderly investors:<\/p>\n<ul>\n<li>Korea Financial Investment Association Standard Investment Solicitation Guidelines: Classifies persons 70 or older as &#8220;vulnerable financial consumers&#8221;<\/li>\n<li>The defendant&#8217;s own investment solicitation policy: Required enhanced sales and protection procedures for elderly investors<\/li>\n<li>Financial Consumer Protection Act of South Korea (enacted March 24, 2020), Article 17 and Enforcement Decree Article 11: Explicitly identify &#8220;age&#8221; as relevant information for assessing loss-bearing capacity<\/li>\n<\/ul>\n<div class=\"statute-box\">\n<span class=\"statute-title\">Financial Consumer Protection Act, Article 17 (Suitability Principle), Paragraph 2, Item 2<\/span><\/p>\n<p class=\"statute-text\">When recommending the conclusion of a contract for the following financial products to ordinary financial consumers, financial product distributors, etc. shall ascertain through interviews, questions, etc. the information categorized as follows, obtain confirmation from the ordinary financial consumer through signature (&#8230;), seal, recording, or other means prescribed by Presidential Decree, maintain and manage such information, and provide the confirmed content to the ordinary financial consumer without delay.<br \/>\n2. Investment products (&#8230;): (a) the ordinary financial consumer&#8217;s purpose for acquiring or disposing of the relevant financial product, (b) financial situation, (c) acquisition or disposal experience<br \/>\n4. Other matters necessary to recommend the conclusion of financial product contracts suitable for ordinary financial consumers, as prescribed by Presidential Decree<\/p>\n<p><span class=\"statute-title\">Same Act, Enforcement Decree, Article 11 (Suitability Principle), Paragraph 3, Item 2<\/span><\/p>\n<p class=\"statute-text\">&#8220;Matters prescribed by Presidential Decree&#8221; under Article 17(2)(4) of the Act shall mean the following information by category:<br \/>\n2. Investment products under Article 11(1)(2): (a) age of the ordinary financial consumer, (b) information under Item 1(b) and (c) (understanding of financial products, attitude toward risk considering expected gains and losses)<\/p>\n<p><span class=\"statute-source-title\">\u203b Source and Note<\/span><\/p>\n<p class=\"statute-source-text\">Current statute (effective January 2, 2026) and Enforcement Decree (effective April 28, 2026), verified through the Korean Government Legislation Information Center. Although the trust contract (November 18, 2019) predates this statute (enacted March 24, 2020), the court referenced this provision to confirm the importance of age as an investor information factor (Decision pp. 14).<\/p>\n<\/div>\n<h3>Why This Specific Product Was Particularly Unsuitable<\/h3>\n<p>The court drew the unsuitability conclusion from the very nature of private equity funds. These products are designed for a small number of <strong>professional investors with high risk-tolerance<\/strong>, and the South Korean Capital Markets Act&#8217;s eligibility threshold (KRW 300 million minimum investment, later raised to KRW 500 million for individuals) reflects an explicit policy of restricting access by ordinary investors with limited loss-bearing capacity.<\/p>\n<div class=\"statute-box\">\n<span class=\"statute-title\">[Former Law] Former Capital Markets Act, Article 249-2 (Investors in Privately Offered Funds)<\/span><\/p>\n<p class=\"statute-text\">&#8220;A privately offered investment fund manager or privately offered investment company may issue collective investment securities only to investors falling under one of the following (hereinafter, &#8216;qualified investors&#8217;):<br \/>\n1. Professional investors prescribed by Presidential Decree<br \/>\n2. Individuals or corporations or other entities investing at least KRW 100 million and not less than the amount prescribed by Presidential Decree&#8221;<\/p>\n<p><span class=\"statute-title\">[Former Law] Same Act, Enforcement Decree, Article 271, Paragraph 2, Item 2<\/span><\/p>\n<p class=\"statute-text\">&#8220;The amount prescribed by Presidential Decree under Article 249-2(2) of the Act shall be&#8230; For investments in privately offered funds other than those under Item 1: KRW 300 million.&#8221;<\/p>\n<p><span class=\"statute-title\">[Current Law] Capital Markets Act, Article 249-2 (Investors in General Privately Offered Funds)<\/span><\/p>\n<p class=\"statute-text\">A general privately offered investment trust manager or general privately offered investment company etc. may issue collective investment securities only to investors falling under one of the following (hereinafter, &#8220;qualified investors&#8221;):<br \/>\n1. Professional investors prescribed by Presidential Decree<br \/>\n2. Individuals, corporations, or other entities investing at least KRW 100 million and not less than the amount prescribed by Presidential Decree (including funds under laws listed in Schedule 2 of the National Finance Act and collective investment vehicles)<\/p>\n<p><span class=\"statute-title\">[Current Law] Same Act, Enforcement Decree, Article 271, Paragraph 2<\/span><\/p>\n<p class=\"statute-text\">The &#8220;amount prescribed by Presidential Decree&#8221; under Article 249-2(2) of the Act shall mean the following:<br \/>\n1. For investments in general privately offered funds where the aggregate amount under each subparagraph of Article 249-7(1) does not exceed 200% of the fund&#8217;s net asset value: KRW 300 million<br \/>\n2. For investments in general privately offered funds other than those under subparagraph 1: <strong>KRW 500 million<\/strong><\/p>\n<p><span class=\"statute-source-title\">\u203b Source and Note<\/span><\/p>\n<p class=\"statute-source-text\">Former law cited from Seoul Northern District Court Decision No. 2024 Gadan 161390 (footnote 1, p. 5). Current law verified through the Korean Government Legislation Information Center: Capital Markets Act (effective March 17, 2026), Enforcement Decree (effective April 28, 2026). <strong><u>The &#8220;KRW 300 million&#8221; threshold under former Enforcement Decree Article 271(2)(2) was raised to &#8220;KRW 500 million&#8221; by the February 9, 2021 amendment.<\/u><\/strong> The product type previously called &#8220;specialized privately offered investment fund&#8221; was renamed to &#8220;general privately offered investment fund&#8221; by the October 21, 2021 amendment.<\/p>\n<\/div>\n<p>The product had additional unusual features:<\/p>\n<ul>\n<li><strong>Formal maturity but actual indefiniteness<\/strong>: Even at the formal maturity, no settlement could occur until all four properties (worth KRW 48.3 billion in acquisition price) were sold<\/li>\n<li><strong>Liquidity restriction<\/strong>: Closed-end fund with no early redemption<\/li>\n<li><strong>Statutory amendment risk<\/strong>: Mid-term raising of the eligibility threshold from KRW 300 million to KRW 500 million made it impossible to deliver the beneficial certificates themselves to the investor in lieu of cash settlement, should that path become necessary<\/li>\n<\/ul>\n<p>The court emphasized that <strong>this combination of valuation and settlement uncertainty represents specialized content that even ordinarily knowledgeable persons would have difficulty understanding<\/strong>. Indeed, the court noted that even a major South Korean law firm representing the defendant initially took the position that the plaintiff could not receive the beneficial certificates as in-kind settlement, before later reversing its position.<\/p>\n<p><\/p>\n<h2 id=\"section6\">6. The Reality Behind &#8220;Signed and Acknowledged&#8221; Forms<\/h2>\n<p>South Korean courts assess the duty to explain by reference to the <strong>specific, individual investor<\/strong> \u2014 whether that investor in fact understood the key information. Elderly investors require <strong>enhanced explanation<\/strong>, delivered in clearer and more accessible terms.<\/p>\n<div class=\"statute-box\">\n<span class=\"statute-title\">[Former Law] Former Capital Markets Act, Article 47 (Duty to Explain), Paragraph 1<\/span><\/p>\n<p class=\"statute-text\">&#8220;When making investment recommendations to ordinary investors, financial investment business entities shall explain the content of the financial investment product, the risks of the investment, and other matters prescribed by Presidential Decree in such a manner that ordinary investors can understand.&#8221;<\/p>\n<p><span class=\"statute-title\">[Current Law] Capital Markets Act, Article 47<\/span><\/p>\n<p class=\"statute-text\">Deleted \u3008March 24, 2020\u3009<\/p>\n<p><span class=\"statute-title\">[Current Law] Financial Consumer Protection Act, Article 19 (Duty to Explain)<\/span><\/p>\n<p class=\"statute-text\">(1) When recommending the conclusion of a contract (&#8230;) to ordinary financial consumers (&#8230;), financial product distributors, etc. shall explain the following important matters concerning financial products in a manner that ordinary financial consumers can understand.<br \/>\n1. Matters categorized as follows: (b) Investment products: (1) content of the investment product, (2) risks of investment, (3) risk grade designated by the financial product direct distributor (&#8230;), (4) other important matters concerning investment products (&#8230;)<br \/>\n(2) Financial product distributors, etc. shall provide an explanatory document to ordinary financial consumers and obtain confirmation through signature, seal, recording, or other means that the consumer understood the explanation. (&#8230;)<br \/>\n(3) Financial product distributors, etc. shall not make false or distorted explanations regarding important matters (&#8230;) or omit important matters prescribed by Presidential Decree.<\/p>\n<p><span class=\"statute-source-title\">\u203b Source and Note<\/span><\/p>\n<p class=\"statute-source-text\">Former law cited from Seoul Northern District Court Decision No. 2024 Gadan 161390 (p. 31). Current law verified through the Korean Government Legislation Information Center: Capital Markets Act (effective March 17, 2026) and Financial Consumer Protection Act (effective January 2, 2026). <strong><u>The duty to explain under former Capital Markets Act Article 47 was deleted on March 24, 2020 with the enactment of the Financial Consumer Protection Act, and its substance was transferred to Article 19 of that Act, which now serves as general law.<\/u><\/strong> Current Article 19 strengthens protection by specifying explanation items (including risk grade for investment products), expressly requiring delivery of explanatory documents and confirmation of understanding (paragraph 2), and prohibiting false, distorted, or omitted explanation (paragraph 3).<\/p>\n<\/div>\n<h3>Why Signed Forms Were Insufficient Here<\/h3>\n<p>The defendant had obtained the following signed acknowledgments:<\/p>\n<ul>\n<li>Signature on the first page of the product description acknowledging voluntary investment<\/li>\n<li>Handwritten &#8220;confirmed&#8221; notation on warnings about market risks and potential loss<\/li>\n<li>Handwritten &#8220;confirmed&#8221; notation on closed-end fund and no-redemption clauses<\/li>\n<li>Handwritten classification as &#8220;aggressive investor&#8221; and acknowledgment of &#8220;very high risk&#8221; rating<\/li>\n<li>&#8220;Yes&#8221; responses during post-sale monitoring calls<\/li>\n<\/ul>\n<p>The court still found a violation of the duty to explain. The reasoning was as follows.<\/p>\n<p><strong>First, mechanical completion of pre-prepared forms is not understanding.<\/strong> The handwritten content followed firm-prepared instructions, and the terminology \u2014 &#8220;rebalancing and liquidation difficulties,&#8221; &#8220;liquidity restriction,&#8221; &#8220;decline in trust property value&#8221; \u2014 was technical jargon that elderly investors are unlikely to comprehend.<\/p>\n<p><strong>Second, post-transaction monitoring cannot substitute for pre-transaction explanation.<\/strong> Monitoring calls used the same technical terms and elicited only single-word &#8220;yes&#8221; responses, providing no evidence of substantive understanding.<\/p>\n<p><strong>Third, enhanced verification procedures were absent.<\/strong> The firm&#8217;s own internal policy required, for cautionary investment products, supervisory pre-confirmation, in-person interviews, and <strong>recording of consultation<\/strong> \u2014 none of which occurred. The court held that the resulting evidentiary disadvantage falls on the firm.<\/p>\n<p><strong>Fourth, the most critical risk was not explained in plain terms.<\/strong> The product&#8217;s central risk \u2014 that even at maturity, the investor could not recover funds until all four properties were sold \u2014 was <strong>fundamentally counterintuitive to ordinary lay understanding<\/strong>. The firm failed to explain this in terms accessible to elderly investors.<\/p>\n<p><\/p>\n<h2 id=\"section7\">7. Investor Information Currency Requirements Under Korean Law<\/h2>\n<p>Internal validity periods (such as 24 months) cannot satisfy the statutory requirement of <strong>current information<\/strong>. Article 46 of the former Capital Markets Act required information to be current at the time of recommendation. Financial institutions must take reasonable measures to ensure information accuracy and currency before each recommendation.<\/p>\n<div class=\"statute-box\">\n<span class=\"statute-title\">[Former Law] Former Capital Markets Act (prior to amendment by Act No. 16859 of December 31, 2019), Article 46<\/span><\/p>\n<p class=\"statute-text\">Paragraph 2: &#8220;A financial investment business entity shall, prior to making investment recommendations to ordinary investors, ascertain through interviews, questions, etc. the ordinary investor&#8217;s investment objectives, financial situation, and investment experience, and shall obtain confirmation thereof and maintain and manage such information.&#8221;<br \/>\nParagraph 3: &#8220;When making investment recommendations to ordinary investors, a financial investment business entity shall not make recommendations that, in light of the ordinary investor&#8217;s investment objectives, financial situation, and investment experience, are unsuitable for that investor.&#8221; (Suitability Principle)<\/p>\n<p><span class=\"statute-title\">[Current Law] Capital Markets Act, Article 46<\/span><\/p>\n<p class=\"statute-text\">Deleted \u3008March 24, 2020\u3009<\/p>\n<p><span class=\"statute-title\">[Current Law] Financial Consumer Protection Act, Article 17 (Suitability Principle)<\/span><\/p>\n<p class=\"statute-text\">(1) Financial product distributors, etc. shall, when entering into financial product contracts or providing advisory services, confirm whether the counterparty financial consumer is an ordinary financial consumer or a professional financial consumer.<br \/>\n(2) Financial product distributors, etc. shall, when recommending contract conclusion to ordinary financial consumers (&#8230;), ascertain through interviews, questions, etc. the categorized information (&#8230;).<br \/>\n2. Investment products (&#8230;): (a) acquisition or disposal purpose, (b) financial situation, (c) acquisition or disposal experience<br \/>\n(3) Financial product distributors, etc. shall not, in consideration of information categorized under each item of paragraph (2), recommend the conclusion of contracts deemed unsuitable for that ordinary financial consumer.<\/p>\n<p><span class=\"statute-source-title\">\u203b Source and Note<\/span><\/p>\n<p class=\"statute-source-text\">Former law cited from Seoul Northern District Court Decision No. 2024 Gadan 161390 (pp. 8\u20139). Current law verified through the Korean Government Legislation Information Center: Capital Markets Act (effective March 17, 2026) and Financial Consumer Protection Act (effective January 2, 2026). <strong><u>The suitability principle (former Article 46) and duty to explain (former Article 47) under the former Capital Markets Act were both deleted on March 24, 2020 upon enactment of the Financial Consumer Protection Act, with their substance transferred respectively to Article 17 (suitability) and Article 19 (duty to explain) of that Act, which now serves as general law.<\/u><\/strong> The trust contract in this case (November 18, 2019) predates this amendment, so the court applied former law.<\/p>\n<\/div>\n<h3>What Was Missing in This Case<\/h3>\n<p>The investor information form used in this case was prepared on February 26, 2018 \u2014 approximately one year and nine months before the trust contract on November 18, 2019. During that intervening period, the plaintiff had experienced major changes:<\/p>\n<ul>\n<li><strong>From February 3, 2017<\/strong>: Son entered persistent vegetative state, accumulating treatment costs<\/li>\n<li><strong>Around November 2017<\/strong>: Disposed of property in Yangpyeong to support daughter-in-law and grandchildren<\/li>\n<li><strong>July 3, 2019<\/strong>: Spouse died of lung cancer<\/li>\n<li><strong>October 10, 2019<\/strong>: Gifted Gangnam-gu real estate to daughter-in-law and grandchildren<\/li>\n<\/ul>\n<p>Despite these significant changes affecting investment objectives and financial situation, the soliciting employee asked <strong>no questions whatsoever<\/strong> regarding investment objectives, financial situation, or investment experience, relying instead on the firm&#8217;s internal 24-month validity period.<\/p>\n<p>The court found that this approach failed the suitability principle. The pressing actual investment objective \u2014 funding the comatose son&#8217;s medical care and grandchildren&#8217;s education \u2014 was never identified, yet a Grade 1 (very high risk) product was recommended.<\/p>\n<h3>Information Barrier Between Affiliated Financial Institutions<\/h3>\n<p>An additional issue arose because the soliciting employee had received informal information from the affiliated bank&#8217;s staff regarding the plaintiff (e.g., &#8220;she is a former bank employee with extensive financial knowledge and owns a Gangnam building&#8221;). However, the court held that:<\/p>\n<ul>\n<li>Article 48-2 of the Financial Holding Company Act and Article 27-2 of its Enforcement Decree establish a Chinese Wall barring affiliated securities firms from receiving customer information from affiliated financial entities for product solicitation purposes<\/li>\n<li>While the parent-subsidiary relationship in this case did not formally fall within the statute, it was substantively indistinguishable, so the information barrier principle should be respected<\/li>\n<li>Furthermore, the informal information itself was inaccurate (the plaintiff had no such educational or banking background, and the Gangnam property had already been gifted away)<\/li>\n<\/ul>\n<div class=\"statute-box\">\n<span class=\"statute-title\">Financial Holding Company Act, Article 48-2 (Provision and Management of Customer Information), Paragraph 1<\/span><\/p>\n<p class=\"statute-text\">A financial holding company etc. may, notwithstanding Article 4(1) of the Real Name Financial Transactions and Confidentiality Act and Articles 32 and 33 of the Credit Information Use and Protection Act, provide financial transaction information (&#8230;) and personal credit information under Article 32(1) of the Credit Information Use and Protection Act, in accordance with the methods and procedures prescribed by the Financial Services Commission (&#8220;Customer Information Provision Procedure&#8221;), to the financial holding company etc. to which it belongs, for the purpose of internal business management such as credit risk management as prescribed by Presidential Decree.<br \/>\n1. Scope of information that may be provided<br \/>\n2. Encryption and other processing methods of customer information<br \/>\n3. Separate storage of customer information<br \/>\n4. Period and purpose of use of customer information<br \/>\n5. Deletion of customer information after the use period<br \/>\n6. Other matters for strict management of customer information as prescribed by Presidential Decree<\/p>\n<p><span class=\"statute-title\">Same Act, Enforcement Decree, Article 27-2 (Provision and Management of Customer Information), Paragraph 1<\/span><\/p>\n<p class=\"statute-text\">&#8220;Internal business management such as credit risk management as prescribed by Presidential Decree&#8221; under Article 48-2(1) and (2) of the Act shall mean each of the following business activities, <strong>which are not activities of introducing products or services to customers or soliciting purchase<\/strong>:<br \/>\n1. Risk management and internal control, including credit risk management<br \/>\n2. Inspection of business and financial status<br \/>\n3. Customer analysis and product\/service development<br \/>\n4. Performance management<br \/>\n5. Performance of entrusted duties<\/p>\n<p><span class=\"statute-source-title\">\u203b Source<\/span><\/p>\n<p class=\"statute-source-text\">Citation from Seoul Northern District Court Decision No. 2024 Gadan 161390 (footnote 10, p. 22). The provisions in this box reflect the current Financial Holding Company Act (effective September 14, 2023) and its Enforcement Decree (effective October 1, 2025), verified through the Korean Government Legislation Information Center, and are substantively identical to the version cited in the decision.<\/p>\n<\/div>\n<p><\/p>\n<h2 id=\"section8\">8. Practical Implications for Foreign-Invested Companies and Expatriates<\/h2>\n<div class=\"geo-box\">\n<h3>Atlas Legal: Korean Financial Litigation Counsel for International Clients<\/h3>\n<p>This decision is particularly relevant for foreign-invested companies and expatriates residing in South Korea, including those based in the Incheon Free Economic Zone (IFEZ) and Songdo International Business District. Foreign individuals and entities frequently rely on bank-affiliated wealth management services and may encounter similar fact patterns where complex investment products are presented through trusted institutional channels.<\/p>\n<p>Atlas Legal, located in Songdo, Incheon, provides English-language legal services on cross-border financial disputes, securities-related litigation, and investor protection matters under South Korean law. Our team has experience advising on the interplay between the Korean Capital Markets Act, the Financial Consumer Protection Act, and international principles of investor protection.<\/p>\n<p>For foreign-invested companies operating in South Korea, this decision confirms several practical points:<\/p>\n<ul>\n<li>Korean courts apply substantive (not formal) tests of suitability and explanation<\/li>\n<li>The bank\/securities firm distinction does not insulate affiliated entities from enhanced duties<\/li>\n<li>Self-imposed internal sales policies cannot supplant statutory standards under South Korean law<\/li>\n<li>Comparative negligence may be entirely rejected for vulnerable investors<\/li>\n<\/ul>\n<\/div>\n<h3>Litigation Strategy Considerations<\/h3>\n<p>For investors who suffered losses on similar private equity products in South Korea, key evidence includes:<\/p>\n<ul>\n<li>All forms executed at the time of subscription (investor information forms, product descriptions, unsuitability acknowledgments)<\/li>\n<li>Consultation recordings, messaging records, and solicitation materials<\/li>\n<li>Documentation of significant life events affecting financial situation between form preparation and product purchase<\/li>\n<li>Comparison of investment characterizations across affiliated institutions<\/li>\n<\/ul>\n<p>The applicable claims under South Korean law include suitability principle violation, breach of duty to explain, and breach of enhanced customer protection duty. Depending on facts, criminal complaints (Capital Markets Act violations, fraud) may also be considered in parallel.<\/p>\n<p><\/p>\n<h2 id=\"section9\">9. FAQ<\/h2>\n<div class=\"faq-section\">\n<div class=\"faq-item\">\n<div class=\"faq-question\">Q1. Why does South Korean law impose stricter duties on banks affiliated with securities firms?<\/div>\n<div class=\"faq-answer\">A. Under South Korean Supreme Court precedent (Decision 2013 Da 26746, En Banc), banks carry greater public trust than other financial institutions, so their recommendations have a stronger influence on customer decisions. The Seoul Northern District Court extended this enhanced customer protection duty to securities firms operating through bank-integrated branches under unified wealth management strategies, recognizing the structural risk that customers rely on bank credibility when accepting investment recommendations from affiliated brokers.<\/div>\n<\/div>\n<div class=\"faq-item\">\n<div class=\"faq-question\">Q2. Can a securities firm in South Korea rely on a 24-month-old investor information form for new high-risk product recommendations?<\/div>\n<div class=\"faq-answer\">A. No. The Capital Markets Act in South Korea requires current information at the time of recommendation, not merely information within an internally fixed expiration period. The Seoul Northern District Court held that a self-imposed 24-month validity period had no rational basis and could undermine the statutory information-gathering duty. Where the customer has experienced significant changes, updated information must be obtained through fresh interviews.<\/div>\n<\/div>\n<div class=\"faq-item\">\n<div class=\"faq-question\">Q3. Are written confirmations and signatures sufficient to prove the duty to explain in South Korean financial litigation?<\/div>\n<div class=\"faq-answer\">A. Not automatically. The court rejected the firm&#8217;s reliance on signed forms because the language used was technical jargon difficult for elderly investors to understand, the forms were pre-prepared by the firm with handwritten content following its instructions, and required enhanced procedures (recording, video, written records) for elderly investors were not followed. Substantive understanding by the actual investor, not formal compliance with paper procedures, is the test.<\/div>\n<\/div>\n<div class=\"faq-item\">\n<div class=\"faq-question\">Q4. How is comparative negligence treated when the victim is an elderly investor in South Korea?<\/div>\n<div class=\"faq-answer\">A. The Seoul Northern District Court rejected comparative negligence entirely. The court reasoned that the principle of self-responsibility presupposes the investor&#8217;s capacity to understand transaction content, risks, and profit structure. Where the investor lacks such capacity, demanding due care that requires the very capacity she lacks is logically contradictory and would allow the financial institution to mitigate liability through its own breach of duty (citing Korean Supreme Court Decision 2006 Da 16758, October 25, 2007).<\/div>\n<\/div>\n<div class=\"faq-item\">\n<div class=\"faq-question\">Q5. When does the limitation period for delay damages begin in private equity fund loss cases under South Korean law?<\/div>\n<div class=\"faq-answer\">A. Under Korean Supreme Court precedent (2018 Da 212272, June 15, 2018), delay damages run from the date when the unrecovered loss is finalized, not from earlier dates such as when the management firm first requests maturity extension. In this case, that date was October 31, 2024 \u2014 the maturity date when the fund was officially designated as non-redeemable.<\/div>\n<\/div>\n<div class=\"faq-item\">\n<div class=\"faq-question\">Q6. Are internal sales policies of securities firms binding on the suitability principle determination in South Korea?<\/div>\n<div class=\"faq-answer\">A. No. The court held that industry association standards and firm-level sales policies are merely self-regulatory norms that concretize the statutory suitability principle but do not have force of law. Formal compliance with these self-imposed rules does not satisfy the Capital Markets Act&#8217;s suitability principle. Conversely, violation of such self-regulation strongly suggests illegality, but compliance does not create immunity.<\/div>\n<\/div>\n<div class=\"faq-item\">\n<div class=\"faq-question\">Q7. What is the Chinese Wall principle for financial holding companies in South Korea?<\/div>\n<div class=\"faq-answer\">A. Under Article 48-2 of the Financial Holding Company Act and Article 27-2 of its Enforcement Decree, financial holding companies and their affiliates cannot share customer information across affiliates for product solicitation purposes; sharing is permitted only for risk management, internal control, and similar back-office purposes. The Seoul Northern District Court extended this principle by analogy to parent-subsidiary structures that are substantively indistinguishable from financial holding company structures.<\/div>\n<\/div>\n<div class=\"faq-item\">\n<div class=\"faq-question\">Q8. What evidence should an investor preserve when contemplating a private equity fund loss claim in South Korea?<\/div>\n<div class=\"faq-answer\">A. Preserve all subscription documents (investor information forms, product descriptions, unsuitability acknowledgments, elderly investor consultation forms), consultation recordings, messaging records, and solicitation materials. Document significant life events affecting financial situation between form preparation and product purchase. Multiple legal grounds may apply, including suitability principle violation, breach of duty to explain, and breach of enhanced customer protection duty under South Korean law. Early consultation with experienced counsel is recommended given limitation period concerns.<\/div>\n<\/div>\n<\/div>\n<p>This decision (Seoul Northern District Court Decision No. 2024 Gadan 161390, March 10, 2026) is a significant case addressing investor protection in South Korea&#8217;s private equity fund market. Atlas Legal, located in Songdo, Incheon, advises domestic and foreign clients on financial product disputes, private equity fund recovery actions, and related corporate and investment litigation matters under South Korean law.<\/p>\n<p class=\"disclaimer\" style=\"margin: 20px 0;\">\u203b The legal information in this article is provided for general informational purposes only. Legal outcomes depend on specific facts of each case. For actual matters, please consult qualified legal counsel.<\/p>\n<div class=\"author-box\">\n<h3>About the Author<\/h3>\n<div class=\"author-name\">Taejin Kim | Managing Partner<\/div>\n<div class=\"author-info\">Corporate Counseling, Corporate Disputes &#038; White-Collar Crime Defense Attorney<\/div>\n<div class=\"author-info\">Atlas Legal | Incheon Songdo, South Korea<\/div>\n<div class=\"author-info\">Former Public Prosecutor | Judicial Research and Training Institute, 33rd class<\/div>\n<div class=\"author-info\">LL.B &#038; LL.M (Criminal Law), Korea University; LL.M, University of California, Davis<\/div>\n<p><a href=\"https:\/\/atlaw.kr\" target=\"_blank\" rel=\"noopener noreferrer\">Visit Atlas Legal Website<\/a>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Table of Contents 1. The Bottom Line: Full Compensation Without Comparative Negligence 2. Damage Calculation Under South Korean Capital Markets Act 3. Why Bank-Affiliated Securities Firms Bear Heavier Duties in South Korea 4. Self-Regulation Cannot Substitute for Statutory Duties 5. Why Private Equity Funds Are Generally Unsuitable for Elderly Investors in South Korea 6. The&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_kadence_starter_templates_imported_post":false,"_kad_post_transparent":"default","_kad_post_title":"default","_kad_post_layout":"default","_kad_post_sidebar_id":"","_kad_post_content_style":"default","_kad_post_vertical_padding":"default","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"_kad_post_classname":"","footnotes":""},"categories":[223],"tags":[703,706,705,708,707,704],"class_list":["post-792","post","type-post","status-publish","format-standard","hentry","category-corporate-disputes","tag-private-fund-losses-south-korea","tag-capital-markets-act","tag-duty-to-explain-korea","tag-elderly-investor-protection","tag-financial-consumer-protection-act","tag-suitability-principle-korea"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>** Elderly Private Fund Damages in South Korea: Court Ruling | Atlas Legal<\/title>\n<meta name=\"description\" content=\"** South Korean court ordered full compensation to a 73-year-old housewife sold a high-risk private fund. 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