Short-selling in breach of the Law
In November 2001 the company ordered a general trading participant of a stock exchange short-selling of stocks by a client's orders without legally required indication many times. (As the company does not have the trading right for stocks, it put an order through another broker.)
In addition, the company was found to have conducted short sales at a price lower than the latest published price immediately prior to the short sale.
The conduct above was found to have violated the Article 26-3 (4), the Article 26-4 (2) of the Cabinet Order (the Securities and Exchange Law) and the Article 162 (1) (i) of the Law, both of which regulate short-selling.
Conclusion of a contract to manage a discretionary account
The company concluded a contract with a client to manage a discretionary account, which enabled the company to decide whether to purchase or sell, issues of stock, volume and price without obtaining individual consent of the client. And the company executed many transactions based on the contract.
The conduct above was found to have violated the Article 42 (1) (v) of the Law applied based on 14 (1) of the Law on Foreign Securities Firms.
