South Korea accuses BNP Paribas of short-selling violations, Bloomberg News reports

SEOUL: South Korean prosecutors have accused BNP Paribas SA of violating short-selling trading rules on the domestic stock market, Bloomberg News reported Friday, citing sources.

BNP Paribas was one of two companies about which the country’s Financial Supervisory Service filed complaints with prosecutors in December, after the market watchdog uncovered illegal business practices by foreign companies and imposed fines on them.

A spokesman for the Seoul Southern District Prosecutor’s Office said a company was charged last week with violating short-selling rules, but declined to name it.

BNP Paribas SA did not immediately respond to a request for comment.

In South Korea, the Capital Markets Law prohibits short selling shares, or selling shares without first borrowing them or determining that they can be borrowed.

In July, the country’s financial regulator imposed record fines on two subsidiaries of the former Credit Suisse group for short-selling violations.

South Korean financial authorities imposed a market-wide ban on short selling in November 2023 after uncovering illicit trading practices by foreign companies, and plan to lift the ban in March 2025, when they hope to have a system ready to detect such transactions.