SEOUL: A South Korean court on Tuesday (Feb 11) acquitted HSBC on charges of violating the country’s short-selling rules, the Yonhap News Agency reported.
The Hong Kong unit of the bank was charged with illegal short-selling worth nearly 16 billion won (US$11.01 million) by the prosecution, the report said.
The Seoul Southern District Court had ruled that there was no evidence that HSBC employees knowingly violated the rules by carrying out short selling, according to Yonhap.
Prosecutors had also indicted three traders alongside the Hong Kong unit of HSBC for naked short-selling of stocks, it said.
“There was no intention to breach any Korean short selling regulations and we are looking forward to putting this matter behind us,” a spokesperson for HSBC said.
The court did not immediately respond to a request for comment on the report.
In South Korea, naked short-selling of stocks, or selling stocks without borrowing them first or determining they can be borrowed, has been banned by the Capital Markets Act.
Short-selling had been criticised by South Korean retail investors for sparking price falls. A ban has been imposed since November 2023 after authorities found illegal naked short selling by foreign investment banks.
South Korea plans to lift a market-wide ban on stock short-selling in March, when it is expected to have a system ready to detect illegal trades.
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