Yoon Young-sil, 29 November 2018
South Korea’s financial authorities have imposed the biggest ever fine on Goldman Sachs Group for its naked short selling activities.
The Securities & Futures Commission (SFC), an investigative body of the Financial Services Commission (FSC), decided on Nov. 28 to impose a 7.5 billion won ($6.65 million) in fine on Goldman Sachs Group’s subsidiary Goldman Sachs International for violating the short selling rules.
Out of the 7.5 billion won fine, 7.48 billion won (US$6.64 million) is for short selling activities without securing underlying assets and the remaining 16.8 million won (US$14,887) is for its failure to report the net balance of short selling stocks.
Previously, the Financial Supervisory Service (FSS), which carried out an inspection on Goldman Sachs, recommended the SFC to charge a 1 billion won (US$886,132) fine. However, the SFC decided to levy more than seven times higher fine than the amount suggested by the FSS.
According to the SFC, Goldman Sachs International placed short selling orders for 156 listed stocks worth 40.1 billion won (US$35.53 million) between May 30 and 31 without securing those stocks. By market, they were 13 KOSPI stocks and 83 KOSDAQ stocks.