The Financial Supervisory Service (FSS) has launched an inspection of the naked short-selling accident in the Seoul branch of Goldman Sachs Securities on June 4th.
The Financial Supervisory Service said that Goldman Sachs Securities Seoul Branch was not able to settle 20 items (about 5.6 million dollars) in the process of signing a stock short sale order from Goldman Sachs International.
“Goldman Sachs International has been informed that some stock trading lending has not been confirmed,” said the Financial Supervisory Service.
The current law prohibits “naked short selling”. Non-redeemable short selling is prohibited by the financial authorities because it disturbs the market order by issuing sell orders even when there are no lending stocks.
Amid mounting concerns over ‘naked short selling’ following the recent Samsung Securities dividend mistake, the financial authorities said they would take stern measures in case of naked short selling.
Goldman Sachs International said it bought 19 of the 20 outstanding stocks on June 1st, and told the Financial Supervisory Service that they will complete the payment of the remaining stock by June 4th.
The FFS will conduct an inspection into the Seoul Branch of Goldman Sachs Securities from today until June 15th.
