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(Photo= Yonhap news) |
[Alpha Biz= Reporter Kim Sangjin] On the 2nd, it was announced that the Financial Services Commission (FSC) plans to appeal a recent court ruling in a case involving the foreign asset management firm, Kepler Cheuvreux. The company had been found to have engaged in illegal short selling, but the court ruled in favor of Kepler Cheuvreux, challenging the fines imposed by the financial authorities.
The case began in September 2021 when the Securities and Exchange Commission (SEC), under the FSC, determined that Kepler Cheuvreux had illegally sold 41,919 shares of SK Hynix, valued at 4.45 billion won, without borrowing them first. In short selling, borrowing shares before selling them is legal, but selling shares without borrowing them constitutes illegal naked short selling.
The SEC initially fined Kepler Cheuvreux 1.063 billion won, considering the offense as negligent rather than intentional. Kepler Cheuvreux argued that the short sale was a result of a clerical error, claiming that the trade was intended for a different fund, and not for the fund that was used by mistake. The Seoul Administrative Court ruled in favor of Kepler Cheuvreux on August 28, finding that the firm did not act with intent to manipulate the market and that only a portion of the shares sold were executed.
The FSC's appeal will focus on whether Kepler Cheuvreux acted with intent or negligence. The outcome of the appeal will be crucial in determining the final penalty and the broader implications for enforcement against illegal short selling.
AlphaBIZ Kim SangJin(letyou@alphabiz.co.kr)
