South Korea Plans to Fine Two Global Investment Banks for Naked Short Selling

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(Bloomberg) -- South Korea’s financial watchdog is proposing the imposition of record fines on two global investment banks for “routinely and intentionally” ...

-- South Korea’s financial watchdog is proposing the imposition of record fines on two global investment banks for “routinely and intentionally” engaging in naked short-selling, which is considered illegal in the nation.The Hong Kong-based units of the two banks conducted naked short sales in several securities between 2021 and 2022, and could have reaped extra profits from them, the Financial Supervisory Service said in a statement on Sunday, without naming them.

“This is a serious problem,” Kim Jungtae, deputy governor at the FSS, told reporters. “For a long time, they have continued to do naked short-selling while they were aware that the practice is illegal in South Korea.” Officials declined to share the metrics behind calculating the fines but said they are set to be the highest on record, given the size of the naked short selling orders. The current record is a 3.9 billion won fine imposed on Erste Asset Management earlier this year.

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South Korea Plans to Fine Two Global Investment Banks for Naked Short SellingSouth Korea’s financial watchdog is proposing the imposition of record fines on two global investment banks for “routinely and intentionally” engaging in naked short-selling, which is considered illegal in the nation.
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