5 Security Firms Slapped with 3 Bil Won Penalty over HK-linked Derivatives Mis-selling

5 Security Firms Slapped with 3 Bil Won Penalty over HK-linked Derivatives Mis-selling

The Financial Supervisory Service (FSS) has imposed combined penalties totaling 3 billion won on five South Korean security firms for their role in mis-selling equity-linked securities (ELS) linked to Hong Kong's H Index. These penalties follow reports of violations in recording procedures and failure to notify investment risks.

Among the firms, KB Securities was hit with the largest fine of 1.7 trillion won. NH Investment & Securities, Mirae Asset Securities, Korea Investment & Securities, and Samsung Securities also received significant penalties for similar charges. ELS products, which track the performance of Hong Kong's H Index, saw substantial losses for investors in early 2024 as the index plummeted.