109 Victims of Gallery K Launch Large-Scale Lawsuit Against Korean Financial Planning

In a shocking development, 109 individuals have filed a lawsuit against Korean Financial Planning (KFP) for allegedly encouraging investments in Gallery K,

In a shocking development, 109 individuals have filed a lawsuit against Korean Financial Planning (KFP) for allegedly encouraging investments in Gallery K, a company now facing Ponzi scheme accusations. This article explores the details of the lawsuit, the relationship between KFP and Gallery K, and the broader implications for investors.

Recently, Korean Financial Planning, a corporate insurance agency claiming to provide legitimate financial planning, found itself under legal scrutiny from 109 individuals, including its own agents and clients. These plaintiffs allege that KFP encouraged them to invest in Gallery K, which is now embroiled in serious allegations of running a Ponzi scheme, a type of multi-level financial fraud.

Gallery K has reportedly partnered with KFP, urging its agents to actively sell artwork to clients. However, as customer complaints and financial losses mounted, KFP has been criticized for evading responsibility and remaining silent on the matter. 

According to reports from Newsport, the affected investors entered into a contract with a law firm to file a lawsuit seeking damages against both Gallery K and KFP. The plaintiffs are particularly frustrated that KFP, which previously promoted the sale of Gallery K’s artwork with confidence, has not taken any action to address the growing concerns among investors. The lawsuit is expected to be submitted to the defendants within one to two weeks.

A spokesperson from KFP criticized the company for ignoring the rising damage claims and called it an act of neglect towards both the trusting clients and the agents who followed the company's guidance. The spokesperson noted that suspicions regarding Gallery K had been raised internally since mid-year, yet the management failed to take appropriate action.

KFP has established partnerships with major corporations, including Samsung Electronics, POSCO, and Kia Motors. Many victims of the Gallery K incident are reportedly former and current employees of these companies, with total losses amounting to around 17 billion won (approximately $14 million).

The founder of Gallery K is currently fleeing overseas, and authorities are actively pursuing his extradition. The company attracted investors by proposing a "Sale and Leaseback" profit structure, where Gallery K would purchase artworks from artists and sell them to investors, who would then lease them back to the company. However, there are growing allegations that the company was using new investments to pay off previous ones, characteristic of Ponzi schemes.

Newsport attempted to reach KFP's management for a statement but has yet to receive a response.

The lawsuit against Korean Financial Planning highlights significant concerns regarding transparency and accountability in the financial advising and investment sectors. As more victims come forward, the implications for both KFP and Gallery K could be severe, calling into question the safety of art as an investment and the practices of financial advisory firms.