Choi Jong-ku, chairman of South Korea's Financial Services Commission, said the regulator will impose tougher action against naked short selling or naked shorting, which involves the sale of a security without first borrowing, Yonhap News Agency reported June 5.
Choi's comments came a day after the Financial Supervisory Service began a two-week inspection of Goldman Sachs Group Inc.'s Seoul branch after its failure to settle short-selling transactions. The U.S.-based investment bank's Seoul branch reportedly made a short selling transaction on May 30 but failed to settle about 1.3 million shares worth around 6 billion won for two days.
Naked short selling, or naked shorting, is prohibited in South Korea.
As of June 5, US$1 was equivalent to 1,071.83 South Korean won.
