▲ The logo of the Financial Services Commission (FSC) is seen in this undated file photo provided by the FSC. (PHOTO NOT FOR SALE) (Yonhap)

financial firms-illegal short selling

FSC imposes fines on foreign financial firms for illegal short selling

SEOUL, July 14 (Yonhap) -- South Korea's financial regulator has imposed fines on foreign financial companies, including Mizuho Securities Asia Ltd. and J.P. Morgan Securities plc, for illegal short selling, sources said Friday.

According to the sources, the Securities and Futures Commission under the Financial Services Commission (FSC) in May ordered Mizuho Securities Asia to pay 733.7 million won (US$579,540) in fine for the naked short selling of more than 10,000 shares of SK Inc. in June 2021.

Mizuho was found to have mistakenly thought it had made a borrowing arrangement for the SK shares when it actually had not.

Caisse de depot et placement du Quebec (CDPQ) was also ordered to pay 64.8 million won in fines for the naked short selling of 929 shares of Ecopro BM Co., a company which produces secondary battery materials, in August 2021.

Naked short selling, which refers to conducting short selling without actually borrowing the stocks first, is banned in South Korea.

Investigation showed CDPQ initially tried to buy Ecopro BM shares but the order went wrong after a system reboot.

The FSC also slapped a 1.1 million won-fine on J.P. Morgan Securities for short selling 786 shares of S-Energy Co., a solar panel manufacturer, and 7.3 million won on Rayliant Investment Research for short selling 579 shares of pharmaceutical firm Alteogen Inc.

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