Shinhan Investment & Securities-Kclavis' "Two-Year Legal Battle"... Shinhan's Partial Victory in Reimbursement Claim Finalized [fnMarketWatch]

[Financial News] A reimbursement claim filed by Shinhan Investment & Securities in a liability dispute over a financial product jointly participated in by Shinhan Investment & Securities and Kclavis Asset Management was partially upheld at the first trial. The appeal was dismissed, making the lower court's ruling final.
The losses and liability issues related to Shinhan-Kclavis First Mover No. 1, which the two companies jointly managed, escalated into a reimbursement lawsuit. The case has drawn close industry attention because it serves as an example of how liability is divided between a securities firm and an asset manager in the investment process for a financial product.
According to investment banking industry sources on the 29th, the appellate ruling in the reimbursement lawsuit between Shinhan Investment & Securities and Kclavis Asset Management recently became final.
Seoul Central District Court dismissed the appeal on the 17th, and the ruling became final on the 23rd.
The product at the center of the lawsuit was identified as Shinhan-Kclavis First Mover No. 1. Shinhan Investment & Securities and Kclavis Asset Management jointly participated in the product, which led to a reimbursement dispute over losses incurred during the investment process and the allocation of liability.
The legal battle began in 2024. The case numbers were 2024Gahap54438 at the first trial and 2025Na209114 on appeal, with Shinhan Investment & Securities as the plaintiff. The court partially upheld Shinhan Investment & Securities' reimbursement claim at the first trial. After the appeal was dismissed, the nearly two-year legal battle effectively came to an end.
One of the key issues considered by the court was a "negligent breach of the duty of care" during the investment process. The issue was not simply whether losses had occurred in the product and could therefore be attributed to the asset manager. Rather, the roles and duties of care of each participant appear to have determined the scope of liability.
The product also appears in disclosures by Shinhan Financial Group affiliates. Shinhan-Kclavis First Mover No. 1 was newly added to the investment portfolio in 2021 and was also listed as a consolidated structured entity of the group in Shinhan Financial Group disclosures. The securities firm and asset manager, once investment partners, ended up facing each other in court over responsibility for losses from the product.
A Shinhan Investment & Securities official said, "The court partially upheld our reimbursement claim, and payment of the awarded amount has been completed. We respect the court's ruling, which represents a victory in the reimbursement lawsuit filed to protect our rights and customer assets."
Meanwhile, some in the investment banking and legal industries are paying close attention to the ruling in terms of how liability is allocated after losses on financial products. When multiple financial companies participate in designing, investing in and managing a product, losses can lead to reimbursement disputes over which party ultimately bears responsibility.
An investment banking industry source noted, "Because multiple financial companies divide up roles when participating in financial products or alternative investments, the key question after losses occur is who should bear how much responsibility in the sales, arrangement and management processes. This case also requires a comprehensive look at the investment structure of First Mover No. 1, the roles of each party and the scope of the duty of care determined by the court."

[email protected] Kim Kyung-a Reporter