Two Hong Kong banks facing record fines for short-selling in Korea: report

South Korea’s FSS said they made short-selling deals worth KRW40b and KRW16b, respectively.

Two Hong Kong-based investment banks are being fined by South Korea’s Financial Supervisory Service for naked short-selling, reports Reuters.

Naked short selling of stocks, in which an investor short sells shares without first borrowing them or determining if they can be borrowed, is banned by the Capital Markets Act of South Korea.

ALSO READ: KakaoBank buys 10% in Superbank, enters partnership to boost digital banking in Indonesia

The two unnamed investment banks reportedly made short-selling transactions of KRW40b and KR16b won, respectively, the FSS said.

The violations were made for over nine months through May 2022, and five months through December 2021, respectively, and are expected to result in record amounts of fines, the FSS said.

Here’s more from Reuters: