After investment bank HSBC (Hongkong and Shanghai Banking Corporation), accused of illegal short selling worth 15.8 billion KRW, was acquitted in the first trial, the prosecution filed an appeal.
On the 18th, the Seoul Southern District Prosecutors' Office announced that it had submitted an appeal against the first trial verdict concerning HSBC's Hong Kong branch, which is charged with violating the Capital Markets Act, to the court the previous day.
Trader A and two others from HSBC's Hong Kong branch were indicted in March last year on charges of short selling 310,878 shares of nine stocks, including Hotel Shilla, worth approximately 15.78468 billion KRW, from August to December 2021 using a naked short selling method. The HSBC corporation was also prosecuted under the joint liability provision. Naked short selling is a type of credit transaction where shares are sold first and borrowed later, which is prohibited under the Capital Markets Act.
Earlier, the Criminal Division 13 of the Seoul Southern District Court (Presiding Judge Kim Sang-yeon) stated, "It is acknowledged that the defendant bank engaged in naked short selling," but acquitted them, saying, "There is no evidence proving that the CEO conspired with the system operator to conduct naked short selling."
After the first trial verdict, the prosecution stated, "The traders clearly recognized that naked short selling was inevitable," and "Even if the naked short selling orders were automatically submitted, since they managed the entire process, it can be seen that they conspired with the HSBC CEO and others with clear awareness of the crime," and announced that they would consider whether to appeal.
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