Securities Firms All Fined for Short Selling Violations... Meritz and KB Follow Hanwha and Shinhan Investment

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] It has been confirmed that major domestic and international securities firms have consecutively received fines for violating short-selling regulations. The fines include 1 billion KRW for Korea Investment & Securities, 600 million KRW for CLSA Securities, 195 million KRW for Meritz Securities, 72 million KRW for Shinhan Financial Investment, and 12 million KRW for KB Securities.

According to the Financial Supervisory Service's electronic disclosure system on the 28th, Korea Financial Group announced in its first-quarter report that it was fined 1 billion KRW by the Financial Supervisory Service and the Financial Services Commission last February for violating the short-selling quote display rule during borrowed short-selling orders. The actual fine paid was reduced by 20% to 800 million KRW.

Korea Investment & Securities was found to have omitted the indication of short-selling while short-selling 140.89 million shares of 938 companies, including Samsung Electronics, over a period of 3 years and 3 months from February 2017 to May 2020. The Financial Supervisory Service explained that although it was not legally prohibited naked short-selling, it was a violation of regulations, and due to the accumulation of negligence over a long period, a fine of 1 billion KRW was imposed. Korea Investment & Securities stated, "It is not illegal as it was borrowed short-selling, and the omission of the short-selling indication was a simple mistake," adding, "Although the violation amount seems large due to accumulation over a long period, it was not of a scale that could cause a stock price decline."

Shinhan Financial Investment also reported in its first-quarter report that it was fined 72 million KRW by the Financial Services Commission last February for violating short-selling restrictions. The actual amount paid was reduced by 20% to 57.6 million KRW. It was confirmed that Shinhan Financial Investment violated the 'uptick rule,' a system that prohibits submitting short-selling quotes below the previous price to prevent price declines caused by short-selling. A Shinhan Financial Investment employee reportedly placed quote orders totaling about 200 million KRW below the previous transaction price once each in 2018 and 2019. The company stated, "It was an employee's mistake, and we will strive to prevent recurrence."

In addition, securities firms such as CLSA (600 million KRW), Meritz Securities (195 million KRW), and KB Securities (12 million KRW) were also fined for violating short-selling regulations.

This content was produced with the assistance of AI translation services.