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[Alpha Biz=(Chicago) Reporter Kim Jisun] Three global hedge funds that intentionally placed sales orders without borrowing stocks were caught and sanctioned by financial authorities.
The Securities and Futures Commission, affiliated with the Financial Services Commission, said on the 20th that it has decided to file a complaint with the prosecution and 2.02 billion won in fines for violations of the capital market law by three global hedge funds that took place during the block deal trading process.
The case began in July last year and was finally approved after various reviews, including three meetings of the Financial Supervisory Service's Capital Investigation Review Committee and three meetings of the Securities and Futures Commission.
According to the Securities and Futures Commission, in October 2019, global hedge fund A submitted and signed a sale swap order of 11.6 billion won in the process of negotiating block deal prices of domestic listed companies.
The Securities and Futures Commission said Company A submitted a selling swap order before the transaction agreement to benefit the block deal price. The unfair profit from this is about 3.2 billion won.
In addition, Company A submitted an order for naked short selling in the process of selling the stock before the block deal transaction information was released.
The Securities and Futures Commission judged that the naked public sale, which was aimed at making unfair gains before disclosing important information, was an illegal transaction as it was recognized as an illegal means.
The Securities and Futures Commission saw the above as a violation of the Capital Markets Act and decided that a prosecution investigation was necessary. In addition, a separate fine of 60 million won was imposed for violations of the restriction on short selling.
Global hedge fund Company B and Company C, which participated as buyers of the transaction along with Company A, also submitted and signed a sale swap order worth 176.8 billion won for A's stocks before the information on the block deal was disclosed at a time when the purchase price was set.
The Securities and Futures Commission judged that the block deal trading information was important information that affected market prices. A total of 2.02 billion won in fines was imposed on the sale before the information was released, judging that it constitutes an act of market order disruption.
AlphaBIZ 김지선(stockmk2020@alphabiz.co.kr)
