Korean Financial Regulator Finds 'Illegal' Stock Short Selling At 5 More Global Banks

Korean Financial Regulator Finds 'Illegal' Stock Short Selling At 5 More Global Banks

The additional cases come after the Financial Supervisory Service (FSS) reported in January that it had detected suspected illegal stock short-selling activities at two global IBs, reports Yonhap news agency.

IANSUpdated: Monday, May 06, 2024, 10:29 AM IST
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Representative Image | AFP PHOTO / WANG ZHAO

South Korea's financial regulator said on Monday that it has found suspected cases of naked stock short selling at five more global investment banks (IBs), bringing the total to nine out of the 14 largest global IBs in the country.

Illegal Shortselling Found

The additional cases come after the Financial Supervisory Service (FSS) reported in January that it had detected suspected illegal stock short-selling activities at two global IBs, reports Yonhap news agency. The FSS has been conducting an inspection on all 14 global IBs here since it exposed two IBs suspected of placing naked stock short-selling orders worth 55.6 billion won (USD 40.3 million) in 2021-2022.

Temporary Ban On Shortselling

The financial regulator, together with the Financial Services Commission, had since imposed a temporary ban on stock short selling, currently set to expire at the end of next month.

The FSS said that it has "completed imposing fines (26.5 billion won) on the first two companies that engaged in illegal stock shortselling, worth 55.6 billion won, and referred them to the prosecution."

"While conducting an inspection of all (global IBs), it has exposed illegal shortselling by seven additional companies, worth 155.6 billion won," it added.

The inspection of the other five global IBs is still underway, according to the FSS. The financial regulator said it will swiftly take punitive measures once the naked stock short selling allegations are confirmed. 

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