The financial regulators in South Korea imposed on Monday a record fine of 26.5 billion won (approximately $20.3 million) on BNP Paribas and HSBC for illegal naked short selling activities. "The violations were a grave matter that hurts the market order and investor trust," the Securities and Futures Commission said.
BNP Paribas' Hong Kong unit was specifically found to have made naked short-selling orders valued at 40 billion won across 101 stocks, including shares of Kakao Corp., from September 2021 to May 2022. Similarly, HSBC is accused of conducting naked short selling orders worth 16 billion won involving nine Korean stocks between August and December 2021.
The penalty marks the most substantial fine against financial firms since the country instituted penalties for violating short selling restrictions in April 2021. Both global investment banks are also being referred to prosecutors for further action due to these violations.
