Named and Shamed
The Securities and Futures Commission of the Financial Services Commission is scheduled to deliberate on pecuniary penalties on two foreign financial companies. The Financial Investment Services and Capital Markets Act of South Korea was revised in 2021 so that the maximum pecuniary penalty in case of illegal short selling can be 100 percent of the order amount. The deliberation will be the first short selling penalty deliberation after the revision.
Before the revision, the fine was around 60 million won in most cases, and many pointed out that those fines were too lenient to effectively prevent illegal short selling.
The two cases in question, however, occurred after the revision in 2021 and pecuniary penalties will be imposed instead of fines. Each penalty may be up to billions of won.
Last month, the Financial Services Commission disclosed for the first time the names of foreign securities companies that committed illegal short selling. The five foreign securities companies include Credit Suisse.