By Caroline Van Hasselt
Of DOW JONES NEWSWIRES
TORONTO (Dow Jones)--Royal Bank of Canada (RY) says it has not yet received any formal notification of a C$2.9 million Korean class-action lawsuit related to investor losses incurred in equity-linked derivative products, a bank spokeswoman said.
The lawsuit was filed Thursday with the Seoul Central District Court on behalf of two investors, according to Asia Pulse, citing the Hannuri Law Office, which represents the claimants. The investors are seeking 3.2 billion won (C$2.9 million) in compensation after losing 25.4% of their investment in equity-linked securities sold by local brokerage Hanwha Securities Co., and issued and managed by the Toronto-based bank.
The complaint was based on the allegation the lender's sell-off of stock led to massive losses on the investment product that would have otherwise earned profits, the media report said.
"We have conducted a full review," said Beverley Weber, a Royal Bank of Canada spokeswoman. "We are absolutely confident that we acted in accordance with all the applicable laws and practices."
The product, called Smart ELS 10, was linked to shares of Korean conglomerate SK Holdings Co. (003600.SE) and structured to yield a 22% return, if upon maturity one year later, SK shares closed at 75% of the original price, or higher, on the day the product was issued. Local brokers sold the product to 438 investors in 2008. When it matured in April 2009, the product returned to investors a loss of 25.4%.
"It's a common product, and we work with local brokers to sell products to retail clients," says Weber. "These are high risk products. High risk, high gain."
Korea's Financial Supervisory Service found RBC guilty after investigating allegations the lender's massive selling of SK shares on the maturity date affected the stock price, according to Asia Pulse. The Korea Exchange in May was examining some 700 ELS products that had recently matured.
RBC does not have a physical presence in Korea.
The Hannuri Law Office did not respond to an email. The Financial Supervisory Service could not be immediately reached for comment.
The case is the first class-action suit brought against a foreign financial institution, reported Asia Pulse.
-By Caroline Van Hasselt, Dow Jones Newswires; 416-306-2023; firstname.lastname@example.org
'CURRENT ISSUE' 카테고리의 다른 글
|Five Technology Trends to Watch (0)||2010.01.10|
|2009 Digital Media M&A Round-Up (0)||2010.01.10|
|로얄뱅크상대 32억원 집단손배소 Royal Bank Canada Hit by C$2.9M Korean Class Action Lawsuit (0)||2010.01.10|
|도청 - 감청 관련 장치및 법규 현황 [미국 의회조사국 작성] (0)||2010.01.06|
|장하다 대한민국 - 한국형 원전, 원전 종주국 미국수출 가시화 (0)||2010.01.05|
|2001-2008 미국 무기 전세계 판매현황 CRS 원문 20091202 (0)||2009.12.27|