Yoon Young-sil, 18 September 2020
The Securities and Futures Commission has decided to impose a fine of 730 million won on four foreign asset management companies and pension funds that conducted naked short selling. The Korea Exchange detected the violation of the law prohibiting it during regular market monitoring.
Short selling is to sell a stock and then buy it back at a lower price. Stock borrowing must precede selling according to the current law on short selling.
According to the Financial Services Commission, the four organizations were wrong about whether they concluded stock borrowing contracts or were in possession of stocks and placed sell orders without owning or borrowing stocks. This occurred before the implementation of the temporary short selling ban in March this year.