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| TITLE | Supreme Court Decision 2013Da2757 Decided May 14, 2015 【Redemptions】 [full Text] |
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| Summary | |
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[1] In cases where a securities company issued and sold marketable securities in which investment profit is linked to the underlying asset price or index on the agreed valuation date, whether the duty of protection applies if there is conflict of interest with investors during hedge trading [2] Where the Defendant, which issued the ELS with an interim redemption condition and sold them to the investors (“Plaintiffs”), placed heavy sell orders of Samsung SDI’s common stocks (underlying asset of the ELS), in the event the valuation price, i.e., closing price on the intermediate valuation date, is higher or equal to the standard price, i.e., closing price on the issuance date, at a price lower than the standard price at the time of market closing on the intermediate valuation date, and as such, the price of Samsung SDI’s common stocks, which had been trading above the standard price 10 minutes prior to the market closing, dropped below the standard price, thereby hindering the fulfillment of the interim redemption condition, the case holding that there is sufficient ground to consider the Defendant’s act as hindering the fulfillment of the interim redemption condition by going against the principle of good faith |
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