A South Korean court has acquitted HSBC’s Hong Kong unit of allegations involving nearly 16 billion won ($11.01 million) in illegal short-selling, as per statements from court authorities.
The Seoul Southern District Court dismissed the charges due to no evidence that HSBC staff willfully contravened the short-selling laws, according to Yonhap news.
A spokesperson for HSBC expressed relief, affirming the absence of any deliberate intention to violate South Korean short-selling laws and looked forward to concluding this ordeal.
In South Korea, naked short-selling, where stocks are sold without first acquiring or ensuring they can be borrowed, is prohibited under the Capital Markets Act. The practice drew criticism for contributing to stock price declines, prompting a ban in November 2023 following detection of illegal short-selling by several foreign investment banks. However, authorities plan to lift the market-wide ban in March this year, pending the development of enhanced surveillance to curb unlawful trading activities.
