This week German financial giant Deutsche Bank was found guilty and banned from trading certain securities and derivatives, after an FSC (Financial Services Commission) investigation ruled that Deutsche Bank staff were guilty of manipulating the South Korean stock exchange.
The probe was launched last year after the KOSPI index fell 2.8% in the last 10 minutes of trading on November 11th. According to the FSC, Deutsche Bank operatives managed to push through $2.2bn worth of trades, having secured a significant position in the derivatives market. The quick fire sale reputedly made a big impact on the market and netted Deutsche Bank employees $41m.
The FSC also concluded that the manipulation was done in collaboration with a number of other Deutsche Bank employees based in Hong Kong. The FSC now intend to bring forward a criminal case and prosecute a number of the banks employees based in Hong Kong, New York and Seoul.
A spokesperson for the bank said that the ruling was ‘disappointing’. The bank further assured authorities that they “will continue to cooperate with the Korean authorities in relation to the investigation of this matter… Deutsche Securities Korea (DSK) regrets sanctions imposed by the Financial Services Commission and the referrals of DSK and employees are very regrettable.”