The Financial Supervisory Service issued last Thursday a disciplinary warning on stock brokers for short selling using insider information, the regulator said Monday.
The FSS said a team of stock traders from SK Securities had failed to avoid conflicts of interest and used unpublished information obtained on duty, both considered breaches of law. It issued cautionary discipline and ordered the securities firm to take autonomous action on the traders.
The traders allegedly short sold stocks after acquiring insider information on five listed firms that a large portion of stocks would be sold under private negotiations, also known as block trades,
The traders earned profits worth 49 million won ($43,800) by short selling some 96,000 shares valued at 1.3 billion won, from January 2014 to July 2015.
The FSS viewed short selling with the knowledge of block trade as a “market disruption.”
By Son Ji-hyoung (firstname.lastname@example.org