The Financial Supervisory Service said on the 10th that it imposed fines of 17.947 billion won on Hana Bank for selling thousands of private funds without properly explaining the risks to investors.
According to the Financial Supervisory Service (FSS), Hana Bank sold 1,241 private fund contracts worth a total of 377.9 billion won to 963 investors from September 2017 to August 2019. In the process, Hana Bank concealed the risk of investment losses from investors and distorted the product structure, explaining it as if it were a product that could reliably recover principal and interest.
For example, the product proposal for Fund A, which invests in accounts receivable in Italy's healthcare sector, stated that it would invest only in low-risk bonds, but in reality it was structured to allow investment in high-risk bonds as well. Fund B was a product that invested in a loan for an expansion project of a building in the United Kingdom that had not yet received permits, but the product proposal presented it as if permits had been obtained and the project was confirmed to proceed.
Multiple violations by Hana Bank were also uncovered, including failure to obtain named confirmation on investor information forms, violation of the duty to explain to investors, violation of the duty to provide explanatory documents, and violation of the recording obligation. The Financial Supervisory Service (FSS) also took disciplinary action against about 10 Hana Bank employees, including notifications of illegal or improper matters to former employees, pay cuts, and reprimands.
A Hana Bank official said, "The fines were fully paid in March 2023, and compensation for customers who purchased the private funds has been almost completed," adding, "Issues with the private fund sales procedures and other problematic areas have been institutionally improved through supplements to the bank's internal regulations."