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Soonghee Lee In May 2011, an employee at a defendant's branches introduced a discretionary investment agreement operated by a certain investment advisory company to individual investors (the plaintiffs). The investment product was mainly invested in KOSPI 200 options listed on the Korea Exchange using contract monies received by the investment advisory company from investors under discretionary investment agreements. In introducing the investment product, the employee presented and introduced a discretionary investment proposal prepared by the investment advisory company. Later, the employee visited the plaintiffs and prepared an application for the opening of an account, which proposed the plaintiffs' subscription to the investment product, with the defendant as the securities company for transactions. In August 2011, the KOSPI 200 stock price index declined sharply, and the plaintiffs incurred considerable losses. The plaintiffs then filed a suit for damages against the defendant, claiming the defendant had made an investment recommendation and thus had violated the suitability principle and its duty to explain, which should have been observed when the investment recommendation was made, under the Financial Investment Services and Capital Markets Act (FISCMA). In the course of litigation, the defendant argued that no investment recommendation had been made, since the investment product was not sold by the defendant itself, and investment recommendations must be construed as limited in scope to cases where the relevant financial investment business recommends an agreement which it directly handles. The defendant's argument was that it had merely introduced the investment product and, for the plaintiffs' convenience, had assisted in the execution of the contracts. Therefore, the defendant had not made an investment recommendation subject to the suitability principle and the duty to explain. In support of such argument, the defendant stated it did not receive any sales commission or operating income, and did not directly handle the investment product. The court of first instance held that the defendant, as a financial investment business, was in the position of a person recommending the investment product to the plaintiffs. The court held that the employee first presented and explained the discretionary investment proposal to the plaintiffs while introducing the investment product; the plaintiffs only intended to invest after listening to such explanation, and their investment decision seems to have been based on the employee's explanation. As the employee even prepared a confirmation statement on the results of investment tendency screening and a discretionary investment agreement for each of the plaintiffs, in their name, the plaintiffs could reasonably believe that the defendant was performing the role of an intermediary for the discretionary investment agreements, and although the defendant did not obtain any sales commission or operating income, the defendant did earn a transaction fee.

Katia Merlini, Hogan Lovells Mid-January to mid-February saw a flurry of moves between firms in Paris, several involving Dentons. Among them was the departure of the former Sonier & Associés restructuring and insolvency duo Gabriel Sonier and Caroline Texier. Having left their original boutique to join Salans in 2011, the pair has now made for GIDE LOYRETTE NOUEL. The hire fills a gap at Gide following the loss of department head Oliver Puech to Bredin Prat. Dentons also lost corporate partner Johannes Jonas (also originally from Salans) to mid-sized US firm COHEN & GRESSER, which made the hire to help launch its Paris office. Jonas has an international background, having previously worked with Bruckhaus Westrick Stegemann and Cleary Gottlieb Steen & Hamilton in Germany, the US and France. The launch creates the firm's third office after New York and Seoul.

The first Fibra to raise international debt offers important lessons for Mexico’s budding real-estate investment trust sector

Olga Barreto of Consortium explains the rights and obligations of the country's microcredit entities

Jan Willem Möller of Loyens & Loeff analyses why the country is emerging as the eurozone’s hub for dim sum bonds

The European Commission's (EC's) proposal to reform regional banks' trading activities is the latest in a line of misguided attempts to prevent a repeat of the 2007 – 2008 global financial crisis. Previously, the UK had favoured a structural split that would force banks to detach their risky trading activities from their retail operations. In the US, the Volcker rule imposes a ban on proprietary trading in the banking group. Europe's recent offering includes both structural separation provisions and a Volcker equivalent that would ban proprietary trading.

US ABS is hoping for something more exciting The asset-backed securities (ABS) market appears to be in full recovery mode. The figures for 2013 were close to their 2000 levels, with increases in auto loans and esoterics helping to pick up the slack created by the dark cloud still hanging over the mortgage industry. The real sign of the market's return however, is its creativity. Though a large amount of vanilla deals are often the hallmark of a market returned to full health, ABS has always thrived on innovation. The trick will be balancing that innovation with appropriate risk management techniques. While there will always be downturns, the latter will help manage those dips in a way that leaves confidence intact, thereby allowing innovation to rebuild the market.

Exchangeables out of Asia are just as rare CP Foods' exchangeable bond was the first out of Thailand and the country's first equity-linked product since BTS Group's convertible in January 2011. Market participants have described exchangeables out of Asia as 'rare beasts.' Deal counsel had to get investors comfortable with not only a product from a new jurisdiction, but also its tense political situation given opposition leaders had promised to start a month of protests to shut down Bangkok from January 13.

The government has set up asset management companies to reduce risk in the country’s banking system. But can they enhance value in distressed businesses?

A European court's rejection of a UK challenge to the EU short-selling ban is set to have wide-ranging consequences for the way the 28-nation bloc regulates its financial services.