South Korea to Impose Fines on 2 Hong Kong Banks for Naked Short-Selling

The Hong Kong investment banks were involved in naked short-selling transactions of about $29 million and $11.8 million, respectively.

The picture shows the street view of South Korea's largest Chinatown in Daerim-dong, Yeongdeungpo-gu, Seoul. The Epoch Times

The South Korean financial regulator said on Sunday that it was considering imposing the heftiest fines on two Hong Kong-based investment banks for their involvement in naked short-selling.

Naked short-selling of stocks—in which investors short-sell shares without first securing a borrowing arrangement or determining they can be borrowed—is prohibited by the Capital Markets Act in South Korea.