Hedge Fund Regal Indicted By South Korea In Short-Selling Probe

2024-10-17 07:00:17

(MENAFN- Live Mint) South Korea regulators have indicted Australian hedge fund Regal Funds Management Pty Ltd and a former employee for alleged breaches of short-selling rules.

The Korean Prosecutor's Office has issued an indictment against the former Regal employee for alleged violation of securities trading legislation in 2019, Regal said in a statement Friday. By extension,“Regal Funds Management has also been indicted,” the company said. The charges follow a market-wide review of short selling by the Korean Financial Services Commission, it said.

Regal, which had A$17 billion under management at the end of September, denied the allegations and said it is“considering its rights under South Korean law,” the company said in the statement. It will assess the materiality of any“potential one-off financial impact to the Group,” after receiving a copy of the indictment which it hasn't yet received.

A spokesman for Seoul Southern District Prosecutors Office declined to comment.

Bloomberg News reported in August that South Korea's prosecutors were asked to conduct an investigation into the hedge fund for alleged capital markets rules violations.

In March, South Korea indicted HSBC Holdings Plc's Hong Kong unit and three of its traders on allegations of illegal short selling.

Banks and hedge funds are under increased scrutiny in South Korea, as the authorities step up efforts to weed out illegal short-sellers and impose tougher penalties for stock manipulation and other unfair trades. The nation's financial authorities said this week it uncovered 211.2 billion won worth of illegal short trades by nine global investment banks.

South Korea will lift the ban of short selling from March 2025, a practice it banned since November last year, as the government sought to root out naked shorting. Naked short selling involves selling of shares without borrowing them first - which is illegal in the country.

With assistance from Shinhye Kang and Youkyung Lee.

This article was generated from an automated news agency feed without modifications to text.

MENAFN17102024007365015876ID1108793283

Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.