South Korea has decided to impose a total fine of 26.5 billion won ($20.3 million) on two global investment banks and one local unit for naked short-selling, the largest penalty ever imposed by Seoul for the illegal practice.
“Violations are serious to the detriment of market order and investor confidence. The three parties’ abstract short-selling operations over several months had been considered deliberate,” South Korea’s Financial Services Commission said in a statement.
The Financial Services Commission will also request prosecutors to investigate the two international investment banks.
The regulator did not identify the entities and said they would disclose their names two months from now. Bloomberg News said last week that South Korea was seeking to fine BNP Paribas and HSBC Holdings at least 10 billion won for short selling, a practice that involves selling shares without borrowing them first. It is illegal in South Korea.
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