Financial Services Commission Imposes Fines on Domestic and Foreign Financial Firms Including Mizuho and JP Morgan for Illegal Short Selling
Financial authorities have imposed fines of up to several hundred million won on domestic and foreign financial companies for illegal short selling.
According to financial authorities on the 14th, the Securities and Futures Commission under the Financial Services Commission approved a measure to impose a fine of 733.7 million won on Mizuho Securities Asia for naked short selling.
In June 2021, Mizuho Securities submitted a sell order for 11,197 SK common shares (worth 3.17 billion won) that it did not own, violating the naked short selling restriction regulations. It was found that Mizuho Securities mistakenly submitted the sell order believing it had already borrowed the SK shares, despite no borrowing contract being in place.
The Quebec Pension Plan Investment Board (CDPQ) in Canada was also fined 64.8 million won after being caught submitting a sell order for 929 shares (280 million won) of Ecopro BM common stock without owning them in August 2021. CDPQ initially entered a buy order into its internal order system, but after a system check and restart, the buy order was mistakenly changed to a sell order and submitted.
JP Morgan was fined 1.1 million won for selling 786 shares (3.73 million won) of S-Energy common stock it did not own, and foreign asset management firm AUM was fined 4.8 million won for naked short selling 250 shares (24.05 million won) of Ecopro HN common stock.
Additionally, foreign asset management firm Relayant Investment Research was fined 7.3 million won for submitting a naked short sell order for 579 shares (50.4 million won) of Alteogen common stock.
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Domestic financial investment companies were also caught. Moon Chase Asset Management was fined 27.6 million won for submitting a sell order for 4,000 shares (92 million won) of Sunic System common stock without owning them, and Sam Asset Management was fined 1.1 million won for submitting a sell order for 2,500 shares (5.5 million won) of Korea Steel common stock without ownership.
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