After it was confirmed that a German real estate fund sold by Hana Bank had suffered a total loss following the COVID-19 pandemic, investors filed a claim for damages last month, alleging “incomplete sales” due to insufficient disclosure of risks and suitability assessments. The fund was classified as a “very high risk” (Level 1) product and should have been recommended only to aggressive investors.

In a media interview, Attorney Lee Seong-woo of Hanbyol Law LLC pointed out, “It cannot be considered a proper sale simply because such documents were provided after the investment funds had already been transferred,” explaining that the timing of the fulfillment of disclosure and explanation obligations and the legality of the recommendation are the key issues in determining whether a sale was improper. Attorney Lee’s argument emphasizes that the retroactive provision of documents can lead to consumer protection issues and liability for damages.

Hana Bank announced that, following an internal review, it would consider compensation for contracts confirmed to involve incomplete sales in the interest of consumer protection; the legal arguments presented by Hanbyol are expected to be the key factor in determining whether incomplete sales are recognized during the mediation and litigation processes.