2014Da214595 (Counterclaim) Any counterclaim demanding a declaration of intent to transfer the right to benefit, etc.

2. The Bank;

The costs of appeal are assessed against Defendant (Counterclaim Plaintiff).

1. As to the duty to protect investors at the investment recommendation stage

A. An asset management company under the former Indirect Investment Asset Management Business Act (amended by Act No. 8635 of Aug. 3, 2007 and enforced on Feb. 4, 2009 pursuant to Article 2 of the Addenda to the Financial Investment Services and Capital Markets Act; hereinafter “former Indirect Investment Act”) bears the duty of care to protect investors by providing investors with correct information on the profit structure and risk factors of investment trust so that investors can make reasonable investment decisions based on such information.

The duty to protect investors at the investment recommendation stage of the asset management company is not excluded solely for the reason that the investor is not an ordinary investor but a professional investor, and only the characteristics and risk level of the investment trust property, investment experience and expertise of investors are considered in determining the scope and degree of the duty to protect investors.

In addition, any selling company prescribed by the former Indirect Investment Act shall not engage in any act that may mislead investors with regard to important matters when recommending investors to acquire beneficiary certificates for the sale of beneficiary certificates. Furthermore, any selling company is obligated to fully and accurately inform the characteristics of indirect investment, such as the possibility of actual dividends and loss of principal, of trust terms and conditions on investment risks and major contents of investment prospectus (Articles 56(2) and 57(1) of the former Indirect Investment Act).

B. According to the reasoning of the judgment below, the court below determined as follows: (1) The fund of this case as stated in the judgment of the court below is likely to compensate for principal losses by investing in a business highly dangerous; (2) investors are difficult to directly understand the current status of investment objects in a foreign country; (3) the defendant neglected to give accurate notice of the specific status of the development project of this case, such as construction loan failure, development project failure, failure of development project, etc.; and (4) provided false information as if the principal and a certain amount of profit are actually guaranteed even if the development project of this case was failed, and (2) the defendant actively recommended investment accompanied by excessive risk in light of the plaintiffs' investment experience as the actual selling company of the fund of this case, while the defendant failed to explain the risk of the fund of this case, it did not perform its duty to explain that the fund of this case is a safe fund whose principal and profit is substantially guaranteed.

In light of the above legal principles and records, the above determination by the court below is just and acceptable, and there were no errors by exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, or by misapprehending the legal principles on the status and role of an asset management company and a selling company in an indirect investment trust relationship, and the duty of protecting customers against professional investors

2. Regarding the duty of care and good faith at the stage of operating assets

A. Article 19(1) of the former Indirect Investment Act provides that an asset management company shall be liable for damages when it commits an act in violation of Acts and subordinate statutes, the terms and conditions of investment trust, the articles of incorporation of the investment company, and the investment prospectus under Article 56, or when it causes damages to indirect investors by neglecting its business. Article 86(1) provides that an asset management company of the investment trust and the investment company shall manage the indirect investment property with the care of a good manager and protect the interests of indirect investors.

In light of the contents and purport of these regulations, an asset management company has a duty to protect investors' interests by carefully managing the indirect investment property based on the information collected within the possible scope. It shall be determined by comprehensively taking into account all the circumstances such as relevant statutes, contents of the terms and conditions of investment trust, and economic situation and prospects at the time (see Supreme Court Decision 2002Da63572, Feb. 27, 2004).

B. According to the reasoning of the lower judgment, the lower court determined that the Defendant was negligent in performing its duty of due care, despite the fiduciary duty to actively take measures to recover investment amounts and to minimize the losses of investors in the event that the instant development project is discontinued due to the failure of construction loans, etc., the Defendant’s management of the instant fund was supervised as to whether compliance properly uses the investment funds of the instant fund, and closely observe the possibility of collecting funds through security rights and the change in the property of the guarantor in preparation for the suspension of the instant development project due to failure in construction loans, etc.

In light of the aforementioned legal principles and records, the above determination by the court below is just and acceptable, and there was no error of exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, or of misapprehending the legal principles on the duty of care of an asset management company.

3. As to the remaining grounds of appeal

A. (1) With respect to the attribution of beneficial rights, the amount of damages suffered by an investor due to the violation of an asset management company or a dealer’s duty to protect investors under the former Indirect Investment Act is the amount calculated by subtracting the total amount of money recovered or recoverable from the investment principal based on the beneficiary certificates acquired from the investment principal (see Supreme Court Decision 2012Da29649, Jan. 24, 2013). Accordingly, in calculating the amount of damages by deducting the remaining value of the beneficiary certificates from the investment principal, even if the investor was paid damages, the investor is not compensated for the value of the beneficiary certificates, and thus, the investor cannot be deemed as unjust enrichment even after receiving the damages. (2) According to the reasoning of the lower judgment, the lower court recognized the amount calculated by deducting the profits already paid and the remaining value of the beneficiary certificates from the investment principal of the Fund for purchasing the beneficiary certificates of this case, and as long as the Plaintiffs deducted the remaining value of the beneficiary certificates, the Plaintiffs’ remaining value of the beneficiary certificates constitutes unjust enrichment even if the Plaintiffs maintained the status of the Fund.

Considering that it cannot be seen, we rejected the Defendant’s counterclaim seeking the transfer of beneficial rights to the Plaintiffs and the implementation of the alternative entry procedure in the beneficiary certificate account book.

In light of the aforementioned legal principles and records, the above determination by the court below is just and acceptable. In so doing, it did not err by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, or by misapprehending the legal principles on the computation of damages or the return of unjust enrichment.

The Supreme Court's decision cited in the grounds of appeal differs from this case, and thus is inappropriate to be invoked in this case.

B. As to the deduction of trust fees, operating expenses, and hedges expenses

According to the reasoning of the judgment below, the court below rejected the defendant's assertion that the above expenses should be deducted from the amount of damages of the plaintiffs on the ground that it cannot be deemed that the plaintiffs intended to bear the above expenses, in the event that the plaintiffs purchased the beneficiary certificates of this case due to the violation of the defendant's duty to protect customers in selling the beneficiary certificates, and that the expenses such as trust fees, fund operation expenses, and hedge expenses, etc. are disbursed. The plaintiffs' negligence and the above expenses can be acknowledged. At the time when the plaintiffs invested in the K1 Fund in K1 Fund in the judgment of the court below, the above investment amount was used as the redemption expenses of the Fund of this case at the time of the investment, and renounced the collection, or that the defendant's violation of duty to protect investors, and that there was no intent to bear

In light of the relevant legal principles and records, the above determination by the court below is just and acceptable, and there were no errors by misapprehending the legal principles on the assessment of damages.

4. Conclusion

Therefore, all appeals are dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Min Il-young

Justices Park Young-young

Justices Kim Jong-il