March 01, 2011 09:34
Investors who filed a mass civil lawsuit against former boiler-room operator Kim Kyung-joon and his sister Erica Kim have won the final legal battle against the pair, it has belatedly emerged. Kim Kyung-joon is serving a prison term in Korea, and Erica was questioned by prosecutors during an unexpected visit to Korea last week.
A staffer at Optional Capital, formerly Optional Ventures, which was run by Kim, said on Monday, "Small shareholders who filed a lawsuit against the Kims in 2004 in the U.S. court for embezzlement and fraud have finally won the case."
The shareholders sued the Kims in June 2004 for damages for stock manipulation and misappropriation of the company's funds. A jury in the U.S. Federal Court in Los Angeles found for the plaintiffs on most counts after three years of proceedings in February 2008, and ruled that the accused should pay compensation of W66 billion, including W37 billion they spirited to the U.S. and W29 billion in punitive damages.
At the time, Kim Kyung-joon asked to make then-president-elect Lee Myung-bak, who owned the company, a co-defendant, but the court declined.
However, an appeals court overturned the decision three months later, and it took another two years of appeals for the final decision to go in favor of the shareholders. The Kims were ordered to pay back W37 billion they embezzled to the plaintiff.
Optional Capital said the company management will decide how to recover the compensation.
It is understood that Erica Kim's unexpected visit to Korea was largely due to the latest court decision in the U.S. There is plenty of speculation about her motives, including that she came with the intention of cooperating with prosecutors and pleading for lenience.
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