South Korea Fines BNP Paribas and HSBC $14 Million for Naked Short-Selling

South Korea has concluded to impose a fine on BNP Paribas SA, HSBC Holdings Plc and its domestic brokerage unit for naked short-selling for a total of 26.5 billion won (approx. $20.4 million).

According to Bloomberg which cited a person close to the matter, BNP Paribas was ordered to pay 11 billion won, 7.5 billion won for HSBC ($14.2 million for the two global banks) and 8 billion won for its local brokerage unit that the South Korea’s Financial Services Commission did not specify the name of the entity for this wrongdoing.


A naked short-selling is illegal in South Korea. Earlier in November, Financial Services Commission Chairman, Kim Joo-hyun reimposed a short-selling ban on the main index KOSPI 200 and tech index KOSDAQ 150, citing the illegal naked short-selling and calls from some investors that saw massive loss from limited options.

The ban was not something new in South Korea as this was the fourth time of the ban. Regulators imposed a temporary ban in 2008, 2011 and 2020, following major global crises that occurred during that period of time, which were the Global Financial Crisis, the European Liquidity Crisis and the Covid-19 pandemic, respectively.

The story was building since last week after several reports stated that South Korea authorities were seeking to impose a fine of at least 10 billion won on BNP Paribas and HSBC for their role in the illegal naked short-selling.