SEOUL, March 8 (Reuters) – South Korea’s financial regulator fined two companies for naked short selling in the local stock market for the first time under the new law with tougher penalties.
The Financial Services Commission (FSC) said in a statement released on Wednesday that the companies were fined 2.18 billion won and 3.87 billion won respectively for their illegal trading in 2021.
According to the FSC, these were the first cases to be fined under the revised Capital Market Law, which came into effect in April 2021, increasing fines to a maximum of five times illegal gains of 100 million won.
Naked short selling of stocks — where an investor shorts stocks without first borrowing them or realizing they can be borrowed — is prohibited by South Korea’s capital markets law.
The Commission did not name the companies in the statement.
Reporting by Jihoon Lee
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