Litigation costs shall be borne by the law firm head.

A. The Defendants were indicted at the Seoul Central District Court on suspicion that they committed crimes, such as violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud), as executive officers of AA Company (hereinafter “A”) or representatives of “AB,” a company managing investment funds of the said company.

(Seoul Central District Court 2015Gohap974, 995 (Joint), 1010 (Joint), 1021). On April 4, 2016, the above court recognized the following criminal facts, sentenced the Defendants to a conviction, and ordered the Defendants to pay damages to 2,466 victims.

Defendant V is the real representative of AA; Defendant X is the director of the marketing headquarters; Defendant Y is the nominal representative director; Defendant W is the incidental list; Defendant Z is the private enterprise managing the investment funds of AA. AB. A.

Around March 2015, the Defendants of the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud) made a false statement to the effect that “If the Defendants are entrusted with investment funds to A, they will invest the funds in overseas futures, guarantee the principal after three months, and guarantee the investment returns equivalent to approximately 2.5% per month.”

However, the Defendants thought that most of the above investments were to be used for the purpose of using the “comfort” in return, etc. to investors of AC and investors of AA prior to the operation of AA.

The Defendants, as seen above, were remitted to KRW 138,031,00,000 in total from 2,993 victims, including deceiving the victims.

(b) Any person who violates the Act on the Regulation of Conducting Fund-Raising Business without obtaining authorization or permission, or making registration or report under Acts and subordinate statutes, and promises to pay the principal in the future or an amount in excess thereof.