Samsung Asset Management has successfully concluded a class action lawsuit for damages related to the crude oil futures exchange-traded fund (ETF) after five years of litigation with investors.
According to the financial investment industry on the 12th, 1,013 general investors who had filed a class action lawsuit against Samsung Asset Management claiming 4.8 billion won in damages related to the 'KODEX WTI Crude Oil Futures (H) ETF' submitted a withdrawal of appeal on the 7th. As a result, the decision of the second trial, in which Samsung Asset Management won all the cases, was finalized, bringing the lawsuit to a close.
This lawsuit is known to have the largest number of participants among the class action lawsuits filed against Samsung Asset Management regarding crude oil futures ETFs.
Samsung Asset Management's crude oil futures ETF lawsuit began in April 2020, following a significant drop in international oil prices. At that time, as the spot price of international crude oil plummeted due to the COVID-19 pandemic, Samsung Asset Management reduced the proportion of the KODEX WTI Crude Oil Futures (H) ETF based on the West Texas Intermediate (WTI) futures price from the original 73% to 34%, distributing some to the July contract (19%), August contract (19%), and September contract (9%).
However, contrary to expectations, the June contract price rebounded by over 40%, and this ETF saw only a 4.3% increase, failing to benefit. In response, investors launched a series of lawsuits against Samsung Asset Management, alleging that the company changed the ETF composition arbitrarily without prior notice.
There were a total of 10 related lawsuits, all of which Samsung Asset Management won in the first and second trials. A lawsuit filed by 22 general investors in 2022 also reached the Supreme Court but was dismissed. Currently, only a 2.2 billion won damage claim from another 344 general investors who appealed last year remains. This lawsuit is currently undergoing a second trial. However, industry insiders believe that since the court has previously ruled in favor of Samsung Asset Management in all related lawsuits, the outcome is expected to be the same.
The court determined that Samsung Asset Management's contract distribution measures did not violate the trust contract or the contents of the investment prospectus, and it could not be deemed that there was a breach of the obligation for prior or regular disclosure. Moreover, the court ruled that the implementation of the contract distribution measures did not constitute a neglect of duty by the collective investment operator.
Samsung Asset Management is reported to not plan to release a separate statement regarding the crude oil futures ETF lawsuit. While they won, they are cautious about the situation of confronting investors.