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Photo = Yonhap news |
[Alpha Biz= Paul Lee] As the full resumption of short selling is set for March 31, financial authorities have imposed fines totaling more than 635 billion KRW on 58 entities involved in illegal short selling (naked short selling) over the past two years.
According to a report received by Rep. Lee Kang-il of the Democratic Party from the Financial Supervisory Service (FSS), a total of 58 entities were fined 635.6 billion KRW from March 2023 to February 2024, following the first fine imposed in March 2023.
The FSS tightened its regulations following the amendment to the Capital Markets Act in April 2021, transitioning penalties for short-selling violations from fines to imposed financial penalties. Additionally, starting in 2023, the FSS has conducted a comprehensive investigation into illegal short selling involving 14 global investment banks (IBs).
The largest fine was imposed on CSAG and CSSL, subsidiaries of the former Credit Suisse Group, which were fined 271.7 billion KRW in July 2023. These firms were caught submitting sell orders for domestic stocks worth approximately 1 trillion KRW that they did not own.
In December 2023, BNP Paribas was fined 190.6 billion KRW (including 114.4 billion KRW for BNP Paribas and 76.2 billion KRW for BNP Paribas Securities), while HSBC was fined 74.7 billion KRW. The authorities concluded that these violations were intentional, and subsequently referred the cases to prosecutors for criminal investigation.
AlphaBIZ Paul Lee(hoondork1977@alphabiz.co.kr)
