Another Hedge Fund Is Now Indicted For Illegal Short Selling

October 18, 2024

Updated on November 22, 2024

Another hedge fund is now indicted for illegal short selling by South Korean securities regulators, a growing trend in the country.

South Korean regulators have indicted Australian hedge fund Regal Funds Management Pty Ltd and a former employee for alleged violations of short-selling regulations.

The Korean Prosecutor’s Office has formally charged the former Regal employee for purported breaches of securities trading laws dating back to 2019.

Regal confirmed in a statement on Friday that the firm has also been indicted in connection with these allegations.

The charges stem from a comprehensive review of short selling conducted by the Korean Financial Services Commission.

Regal, which managed $17 billion as of the end of September, has denied the accusations and stated that it is “considering its rights under South Korean law.”

The company plans to evaluate any potential financial impact after it receives a copy of the indictment, which it has not yet obtained.

A spokesperson for the Seoul Southern District Prosecutor’s Office declined to provide additional comments.

Bloomberg News reported in August that prosecutors in South Korea had been prompted to investigate the hedge fund for possible violations of capital markets regulations.

In March, South Korea also indicted the Hong Kong unit of HSBC Holdings Plc and three of its traders for similar illegal short-selling activities.

Banks and hedge funds are facing intensified scrutiny in South Korea as authorities increase their efforts to eliminate illegal short-selling practices and impose stricter penalties for stock manipulation and other unfair trading activities.

This week, financial authorities announced the discovery of illegal short trades worth 211.2 billion won involving nine global investment banks.

Additionally, South Korea plans to lift its ban on short selling in March 2025, a restriction that has been in place since November of last year as the government aimed to eliminate naked short selling — the practice of selling shares without first borrowing them, which is illegal.

For more Securities Regulation News and updates like this, join the newsletter or opt-in for push notifications.

Also Read: Illegal Short Sellers Will Now Face Life Sentence In Prison

More on South Korea Markets

Empowering Retail Investors

Treat Frank Nez to a coffee

Buy Frank Nez a coffee here ☕

Or support the blog monthly here ❤️

Market News Published Daily 📰

Don’t forget to opt-in for push notifications so you don’t miss a single article!

Be sure to share this article with your community.

Also, thank you to all of our site sponsors.

This year we’ve been able to increase push notifications slots making it more convenient than ever for new readers to receive their daily market news and updates.

Our readers can now donate $3 per month to support independent journalism.

For daily news and updates on your favorite stories, opt-in for push notifications.

Follow Frank Nez on X (Twitter), Instagram, or Facebook.

More Market News 📰