2023-12-20 10:14:00
A large number of global hedge funds that intentionally placed sell orders to lower stock prices without actually borrowing stocks (no borrowing) were caught by financial authorities.
On the 20th, the Securities and Futures Commission of the Financial Services Commission imposed a fine (KRW 2.02 billion) and fines on the stock trading of three global hedge fund management companies for illegal trading, disrupting market order, and violating unleveraged short selling, and reported them to the prosecution. announced that it had decided to take action.
According to the Securities and Exchange Commission, in October 2019, Company A entered into a sell swap order for shares of Company A worth 11.6 billion won in the process of negotiating the price of an after-hours block deal of shares of Company A. This means that they entered into a sell swap transaction to gain an advantage when negotiating the price of a block deal. The Securities and Exchange Commission determined that Company A obtained unfair profits of approximately 3.2 billion won in this way.
In addition, it was confirmed that Company A submitted an unlevered short-selling order in the process of selling Company A’s stocks before the block deal transaction information was disclosed.
Along with Company A, Companies B and C participated as buyers in the block deal transaction for Company A’s stocks. With the purchase price set, they entered into a sell swap order worth 176.8 billion won for Company A’s stocks before the block deal information was disclosed. As block deal transaction information has a significant impact on market prices, the Securities and Exchange Commission determined that their trading activities before information disclosure disrupted market order and imposed a fine of 2.02 billion won.
An official from the investment banking (IB) industry said, “Block deal transactions are matters that are announced to the market, so there is a significant risk of abuse by those who obtain information in advance.” “Companies use block deals to avoid influencing intraday stock prices, but “Usually, a company’s stock price tends to fall immediately after news of a block deal is announced,” he explained.
Kim So-young, Vice Chairman of the Financial Services Commission, said, “To establish a sound capital market, we will continue to take strict action against various unfair transactions and violations of short-selling restrictions.”
Reporter Kang Woo-seok [email protected]
1703090771
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