This article was published on April 28, 2025, at 11:20 a.m. on the ChosunBiz RM Report site.
Lee Jong-phil, former vice president of Lime Asset Management and at the center of the 'Lime Fund redemption suspension incident,' has reportedly lost in the first trial of a lawsuit seeking to cancel a penalty surcharge of 70 million won related to fund launch law violations. The Lime incident caused over 4,000 investors to suffer losses of approximately 1.67 trillion won.
The Seoul Administrative Court's Administrative Division 6, presided over by Director General Na Jin-hee, dismissed the claims of former vice president Lee in the first trial of the lawsuit seeking to cancel the penalty surcharge imposed by the Financial Services Commission on January 24.
Lime Asset Management launched a total of 36 funds from November 2018 to July 2019, raising 493 billion won from 1,269 investors. The Financial Services Commission found that former vice president Lee violated the Securities Registration Statement submission obligation under the Capital Markets Act seven times in relation to these fund launches. According to the Capital Markets Act, a securities registration statement must be submitted to the Financial Services Commission when raising funds from more than 50 investors. Consequently, the Financial Services Commission imposed a penalty surcharge of 70 million won on Lee in October 2023.
In response, former vice president Lee filed a lawsuit to cancel the penalty surcharge. He claimed that it was illegal to impose the penalty on him, rather than on the company's CEO or the marketing department executives responsible for submitting the securities registration statement.
In this regard, the court said, "The Capital Markets Act does not limit penalty surcharge targets to 'the representative director of the issuer and the director in charge of the filing task' and added, 'It cannot be viewed as illegal to impose a penalty surcharge on former vice president Lee, who was practically involved in fund issuance and recruitment, for violating the obligation to submit the securities registration statement.'"
Former vice president Lee appealed the first trial ruling.
Meanwhile, in relation to the Lime incident, former vice president Lee received a sentence of 20 years in prison, a fine of 4.8 billion won, and a confiscation order of over 1.8177 billion won for violating the Act on the Aggravated Punishment of Specific Economic Crimes (breach of trust) from the Supreme Court in 2022.