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Photo = Yonhap news |
[Alpha Biz= Reporter Kim Sangjin] Morgan Stanley and Merrill Lynch Securities have been fined by financial authorities for conducting illegal short selling practices.
On the 12th, the Financial Services Commission's (FSC) Securities and Futures Commission (SFC) announced that during the 16th SFC meeting on September 11, it had resolved to impose fines and penalties on Morgan Stanley Securities, Merrill Lynch Securities, and Tyndall Partners for violating short selling regulations.
Morgan Stanley Securities was found to have submitted short sell orders on 96,293 shares across four stocks, including Samsung Electronics, between October 4, 2019, and February 26, 2020. The orders, valued at approximately 7.04 billion KRW, did not indicate they were short sales, violating the Capital Markets Act (Articles 180, 449, 208, and 390). As a result, the SFC imposed a fine of 102 million KRW on Morgan Stanley.
Merrill Lynch’s Seoul branch was also fined 48 million KRW for failing to label short sell orders on shares of Samsung Electro-Mechanics and one other stock between October 2 and October 21, 2019. These orders amounted to approximately 3.98 trillion KRW.
Tyndall Partners was fined 16.1 million KRW for selling 13,200 shares of LX Holdings without ownership on October 1, 2021, also violating the Capital Markets Act (Articles 180 and 429).
With plans to fully resume short selling by the end of March next year, authorities are intensifying efforts to detect illegal short selling. Recently, Barclays and Citigroup were also flagged for illegal short selling activities, and fines will be finalized by the SFC following review by the FSC’s Capital Market Investigation Committee.
Alphabiz Reporter Kim SangJin(letyou@alphabiz.co.kr)
