SEOUL (AFP) – South Korea's stock market announced Friday it would fine Deutsche Bank's local brokerage almost $886,000 for improper transactions, the biggest penalty it has ever imposed.
The move comes after the some of the brokerage's functions were suspended for six months by financial authorities for market manipulation while prosecutors said they were also looking into the case.
The Korea Exchange on Friday ordered the German bank to pay the one billion won fine and urged it to discipline three employees.
It said the unit had engaged in improper arbitrage trading between the futures and spot markets and sold an excessive amount of shares in SK Telecom and KT Corp.
The exchange said the brokerage provided misleading information about the nature of its arbitrage transactions and violated rules on large programme selling orders, which should be reported in advance.
The German bank's Hong Kong unit and local securities unit came under investigation for alleged market manipulation and unfair transactions following a plunge in the South Korean market on November 1, an options expiry day.
The benchmark KOSPI index fell 48 points in the last 10 minutes of trading due to arbitrage trading between the spot and futures markets.
During that time about 2.4 trillion won in sell orders from foreign investors were processed, most of them through Deutsche Bank's local unit.
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http://news.yahoo.com/s/afp/20110225/bs_afp/skoreagermanybankingstocksdeutscheban
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