Before Morgan Stanley Sell Report Released
SK Hynix Sell Order Executed at Seoul Branch Counter
The Korea Exchange has launched an investigation into Morgan Stanley over allegations of 'front-running' after it sold a large volume of SK Hynix shares in advance of issuing a sell recommendation report on SK Hynix.
According to the financial investment industry on the 20th, the Exchange began analyzing accounts regarding Morgan Stanley's execution of sell orders for SK Hynix shares on the 13th, two days before the public release of the sell recommendation report on SK Hynix.
The Exchange is reportedly planning to refer the matter to the Financial Supervisory Service if any irregularities are found during the investigation.
Previously, on the 13th, sell orders for 1,011,719 SK Hynix shares were executed at Morgan Stanley's Seoul branch counter. This volume is about three times the sell volume of the previous day (12th), which was 351,228 shares.
However, some industry insiders believe that simply placing orders through Morgan Stanley's own counter does not necessarily prove that Morgan Stanley engaged in front-running.
In a report published on the 15th, Morgan Stanley lowered the target price for SK Hynix from 260,000 won to 120,000 won and changed its investment opinion from 'overweight' to 'underweight.'
Following the publication of this report, SK Hynix shares plunged 6.14% on the 19th. On the 20th, the stock closed at 157,100 won, up 2.81%.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
