South Korean stocks surge after short-selling ban

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Regulators claim global investment banks’ deceptive trading practices distorted fair market dynamics.

The benchmark Kospi rallied more than 4% Monday on news of a Korean regulator’s probe into global investment banks.

Short selling involves traders borrowing securities to sell in hopes of buying them back at a cheaper price later. The FSC chief said there would be a thorough probe into global investment banks to see whether they have carried out any illegal short selling, warning of “stern punishment”.

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