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| (사진=금융위원회) |
[Alpha Biz=(Chicago) Reporter Paul Lee] There has been a case of receiving billions of won in fines for illegal short selling. Until now, only tens of millions of won per case have been imposed on illegal short selling, but fines can be imposed up to 100% of the amount ordered under the revision of the Capital Markets Act since April last year.
The Securities and Futures Commission under the Financial Services Commission said on the 8th that it has decided to impose fines of 2.18 billion won and 3.87 billion won, respectively, on two financial firms that engaged in naked short selling transactions.
Company A received and disposed of shares scheduled to be issued as a free capital increase in the internal system to assess the fund's value, but recognized them as sellable stocks and submitted a sale order for 210,744 shares (KRW 25.14 billion) not owned by the fund.
Company B violated the restriction on non-borrowing short selling by submitting an order to sell 27,374 shares (KRW 7.329 billion) of stocks it did not own by mistakenly entering the borrowing details of other stocks with similar names in the balance management system.
This is the first case in which a fine equivalent to criminal punishment has been imposed for violations of public sale regulations that have been disposed of as fines or cautionary measures.
Since April last year, the financial authorities have been implementing a revision to the Capital Markets Act that allows fines of up to 100% of short stock selling orders. It also improved the possibility of imprisonment for more than a year and fines of three to five times the amount of profit and avoidance losses.
Company A was fined about 10% of the order amount and company B was fined 50%. In the meantime, short selling fines have been imposed on the number of cases, not the amount, and often do not reach the limit. The maximum was KRW 90 million per case, and Korea Investment & Securities was fined KRW 1 billion last year for illegal short selling accumulated over three years.
AlphaBIZ 폴리(hoondork1977@alphabiz.co.kr)
