Seoul:The Supreme Court has upheld a previous ruling that acquitted HSBC's Hong Kong unit of charges related to the violation of South Korea's short-selling regulations.
According to Yonhap News Agency, prosecutors had indicted the bank in March 2024 for allegedly breaching the Capital Markets Act, which prohibits naked short selling. This marked the first criminal case of its kind in South Korea.
Naked short selling involves selling stocks without having secured them or ensuring they can be secured. The prosecutors accused three employees of the bank of illegally engaging in naked short selling of shares in nine publicly traded companies, valued at approximately 15.8 billion won (US$11.8 million), from August to December 2021.
The Seoul Southern District Court initially acquitted the bank, citing a lack of evidence to demonstrate that the employees knowingly violated local regulations through naked short selling. This acquittal was later upheld by an appellate court before being finalized by the Supreme Court.