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(Photo= Yonhap news) |
[Alpha Biz= Reporter Kim Jisun] It has been revealed that nine global investment banks (IBs) engaged in illegal short selling totaling 211.2 billion won (164 stocks) on the domestic stock market. The causes of illegal short selling included inadequate procedures for returning borrowed stocks and submitting short selling orders before confirming borrowing arrangements, highlighting deficiencies in their internal inventory management.
On the 6th, the Financial Supervisory Service announced the 'Interim Investigation Results and Future Plans for Illegal Short Selling by Global IBs'. Last October, the Financial Supervisory Service first discovered large-scale illegal short selling activities by global IBs. Subsequently, they established a 'Short Selling Special Investigation Team' and are currently conducting a comprehensive investigation (14 institutions) into illegal short selling by global IBs.
According to the interim investigation, five new global IBs have been implicated in illegal short selling. They were found to have engaged in illegal short selling totaling 38.8 billion won across 20 stocks.
Previously, the Financial Supervisory Service imposed fines totaling 26.5 billion won on the first two institutions, Company A and B (BNP Paribas and HSBC Hong Kong), and completed the prosecution referral process to the Securities and Futures Commission (SFC).
In early this year, Companies C and D were discovered to have engaged in illegal short selling totaling 54 billion won across five stocks. However, further investigation revealed additional illegal short selling activities totaling 62.8 billion won across 29 stocks.
The Financial Supervisory Service plans to enhance international cooperation with overseas financial authorities in Hong Kong, Singapore, and other countries concerning investigations into illegal short selling.
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
