Lone Star Guilty Of Market Manipulation In Korea

Oct 7 2011 | 11:52am ET

A Korean court has rapped private equity firm Lone Star Funds for manipulating the stock price of a bank in which it owns a controlling stake.

The Seoul court fined a Lone Star unit US$21 million and sentenced the former head of its South Korean office, Paul Yoo, to three years in prison. On the bright side, the ruling appears to clear the way for Lone Star to sell its stake in Korea Exchange Bank to Hana Financial Group for US$4.1 billion.

That deal had been held up by the court proceedings, and even if it were not in place, would likely be required by the court, which will probably disqualify Lone Star as KEB's largest shareholder, forcing it to reduce its stake to 10%.

KEB itself was acquitted in the retrial, which was triggered by allegations that Yoo spread falsehoods about a possible capital reduction at KEB's credit card unit in 2003.


In Depth

Creating An Offshore Hedge Fund Dream Team: The Seven Key Players

Jun 26 2015 | 6:47am ET

If you want to set up an offshore hedge fund, like any great team, you’re only...

Lifestyle

Hedgies Set to Compete in Wall Street Decathlon

Jun 8 2015 | 12:37am ET

The Wall Street Decathlon — a 10-event physical challenge that will crown “Wall...

Guest Contributor

6 Essential Principles To Balance Your Investment Risk

Jun 26 2015 | 10:07am ET

In this article, financial expert Greg Silberman explores how to hedge a private...

 

Editor's Note