Significant Compensation Adjustment for Discovery Fund Mis-selling

The Financial Dispute Mediation Committee has made a landmark decision on April 23, increasing compensation for investors affected by the mis-selling of the Discovery US Fintech Global Bond Fund. IBK's compensation ratio has been raised by 10 percentage points, now covering 80% of investors' losses, while Shin Young Securities will compensate for 59% of the damages.

Behind the Decision: Insolvency Signs and Regulatory Collaboration

Additional inspections uncovered further insolvency signs in the fund's underlying assets, including the purchase of insolvent assets at face value. The Financial Supervisory Service (FSS), alongside the U.S. Securities and Exchange Commission (SEC), confirmed these findings, leading to adjusted compensation ratios.

Investor Misguidance and Compensation Details

Both IBK and Shin Young Securities failed to confirm investors' profiles, recommending unsuitable products and omitting critical risk information. The committee set basic compensation ratios at 30% for IBK and 40% for Shin Young Securities, with additional weightings reflecting their failure to manage risks adequately.

Final Steps: Parties have 20 days to accept the mediation proposal. The FSS plans to address remaining cases based on the committee's standards.