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[Alpha Biz= Reporter Paul Lee] Following BNP Paribas and HSBC, another case of illegal short selling by a Global Investment Bank (IB) has been detected.
According to financial authorities on the 1st, Deputy Director of the Capital Markets and Accounting Division at the Financial Services Commission, Ham Yong-il, will present interim findings on the investigation into illegal short selling by global IBs on the 3rd.
This announcement is interpreted as a follow-up to the measures taken in January of this year. Four months ago, the Financial Services Commission revealed that it had discovered allegations of unauthorized short selling totaling 54 billion won against two global IBs. Unauthorized short selling refers to the act of placing short orders without borrowing stocks, which is illegal in our market.
According to the Financial Services Commission at the time, Company A submitted unauthorized short selling orders for two stocks from March to June 2022. They also placed sell orders based on excessive balances resulting from duplicate entries of borrowing history.
They also sold stocks provided as collateral to external parties without returning them separately, and as a result, borrowed them the next trading day (T+1). Even if they repaid them afterward, it is considered illegal in South Korea.
Company B engaged in unauthorized short selling for three stocks from January 2022 to April 2023. Company B placed sell orders based on excessive balances resulting from duplicate calculations of owned stocks during the process of borrowing stocks between departments. The Financial Services Commission plans to impose fines after considering the intent of global IBs as the investigation concludes.
AlphaBIZ Paul Lee(hoondork1977@alphabiz.co.kr)
