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Regulator claims Woori Financial, KEB Hana Bank engaged in misselling of funds

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Regulator claims Woori Financial, KEB Hana Bank engaged in misselling of funds

South Korea's Financial Supervisory Service said KEB Hana Bank and Woori Financial Group Inc. engaged in misselling derivative-linked fund options, The Korea Times reported Oct. 1, citing the regulator's senior deputy governor Won Seung-yeon.

The regulator claimed that the two companies continued the sales of derivative products and skipped procedures to determine the risks of the products. The watchdog did not disclose corrective measures as inspections are still ongoing.

In August, the FSS began inspection on the two banks after it allegedly offered misleading information on investment yields on the funds.

It also conducted inspections on IBK Securities Co. Ltd., NH Investment & Securities Co. Ltd. and Hana Financial Investment Co. Ltd., as well as Ryukyung PSG Asset Management Inc., KB Asset Management Co. Ltd., Kyobo AXA Investment Managers Co. Ltd., Meritz Asset Management Co. Ltd. and HDC Asset Management Co. Ltd.

According to the watchdog's inspection, about 20% of the options were mis-sold. Woori Financial and KEB Hana Bank sold DLF options worth 795 billion won to 3,243 investors.

As of Oct. 1, US$1 was equivalent to 1,202.37 South Korean won.