Securities Class Action

The "securities" referred to in a securities class action means securities under Article 4 of the Financial Investment Services and Capital Markets Act.

Where losses from trading or otherwise dealing in such securities occur on a collective basis, a lawsuit may be brought.

A securities class action differs structurally from an ordinary civil lawsuit in several respects.

A securities class action differs greatly from an ordinary civil lawsuit in that the suit may proceed without separate authorization from members, and the effect of the judgment extends to all members who did not opt out.

Where investors suffer losses as a result of such unlawful acts, they may claim damages through a securities class action.

The Act does not apply to every company. It applies only to securities transactions of companies that meet certain requirements.

Under Article 3(2) of the 「Securities-Related Class Action Act」, the following companies are covered.

Under Article 5(1) of the 「Securities-Related Class Action Act」, in a securities class action both the plaintiff and the defendant must retain an attorney as their litigation representative.

An attorney may not serve as the representative for the plaintiff in the following cases.

The lead plaintiff must be someone who can fairly represent the interests of the class members.

In addition, a person who has acted as a lead plaintiff or litigation representative in three or more securities class actions within the past three years cannot serve as a lead plaintiff.

The court may, however, allow it in exceptional cases.

A securities class action may proceed only with the court's certification.

Under Article 12 of the 「Securities-Related Class Action Act」, the following requirements apply.

A person who wishes to become the lead plaintiff must file an application for certification of the action together with the complaint.

The court notifies the exchange designated by the Financial Services Commission, and the exchange discloses this to the public.

Within 10 days of receiving the complaint and the application for certification, the court must give public notice of the following.

A member who wishes to become the lead plaintiff may file an application within 30 days of the date of the public notice.

Within 50 days after the notice, the court appoints the most suitable person as the lead plaintiff.

The lead plaintiff must make a prima facie showing of the grounds for the application for certification.

The court then examines both the plaintiff and the defendant before deciding whether to grant certification.

During this process, the court may conduct any necessary inquiry, including obtaining materials from the supervisory authorities.

Once a damages judgment becomes final, the funds are distributed through the following steps.

The distribution administrator carries out the distribution under the court's supervision.

Daeryun Law Firm analyzes the structure and legal issues of a case and provides legal advice to help address procedural problems that may arise as the litigation moves forward.

We also review how the investment losses arose and how the transactions were structured, analyzing whether losses occurred, where responsibility lies, and the scope of compensation, and we develop a response strategy tailored to the particular case.

If you are facing a situation that calls for a legal response, 🔗Damages · Civil Litigation Attorney Legal Consultation Booking is available to review the facts of your case and the direction of your response.