(LEAD) Goldman Sachs fined 7.5 bln won for illegal naked short selling in S. Korea
Yonhap News Agency, 28 November 2018
South Korea’s financial regulator said Wednesday it decided to fine the Seoul branch of Goldman Sachs Group Inc. 7.5 million won (US$6.66 million) for carrying out naked short selling, which is illegal here.
It marked the largest fine against a financial institution for violating the rules that ban such short selling in South Korea.
Market watchers had expected the Financial Services Commission (FSC) to slap a fine of up to 1 billion won against Goldman Sachs for naked short selling, which was carried out in late May.
A short selling transaction was made by Goldman Sachs in late May, but about 1.3 million shares worth some 6 billion won were not delivered for settlement until two days later, according to financial authorities.
At that time, Goldman Sachs issued a sell order of stocks worth 40.1 billion won without borrowing the stocks, the FSC said in a statement.
Short selling, which is legal in South Korea, refers to the sale of borrowed shares in the hope of making a profit from a price fall by buying the shares back at a lower price.
Naked short selling is the practice of short selling without first borrowing shares.
