February 25, 2011 by staff
Summit: G-20, (AP) – Exchange of South Korea’s main stock slapped a record fine from the local unit of Deutsche Bank AG on a sharp decline in the benchmark last year that led to sanctions by the country’s financial regulators. The Korea Stock Exchange said Friday in a statement it would be nice to Deutsche Securities Korea a total of 1 trillion won ($ 888,000) for violating trading rules. It was the largest fine ever given to a member of the exchange, according to spokesman KRX Won Yong-joon.
The exchange, known as KRX, also demanded that Deutsche Securities Korea to take disciplinary action against three employees. He called for one to be revoked or suspended. Two other employees either needs to have their wages cut or be reprimanded, he said. The Korea Stock Exchange did not identify the employees.
Lee Chul-jae, director of the division of market exchange oversight, told reporters that additional sanctions are possible if applications are not implemented, according to Won. Deutsche Securities Korea has one month in which he can appeal the fine and requests for certification of employees, “said Won.
Deutsche Securities Korea said in a statement it “deeply regrets” the actions taken by the exchange, but added that he “respects his decision to impose such sanctions.”
The action of the exchange came after financial regulators in South Korea said Wednesday they would ask prosecutors to investigate five Deutsche Bank employees in South Korea, Hong Kong and New York during the alleged price manipulation and unfair trade.
The regulators also said they would suspend certain publicly traded securities and derivatives transactions by Deutsche Securities Korea for six months from 1 April. The local unit should also be forwarded to prosecutors.
Regulators and the Korea Stock Exchange were investigating a sharp drop in Korea Composite Stock Price Index during the last minutes of trading on November. The index, known as the Kospi closed .7 percent lower today.
The end of the session came one-day dive called triple-ghost when stock options, index options and stock index futures all expire. The phenomenon, which occurs four times a year, can lead to increased volatility in stock prices. The regulation says that the alleged manipulation of transactions involving cash and futures resulted in illegal profits of .9 billion won.
Deutsche Bank said Wednesday in a statement it was “disappointed” by the findings and deplored the sanctions and dismissal of employees and the unit of South Korean prosecutors. But he said he would continue to cooperate with the South Korean authorities.
The decline came a day when South Korea was in the spotlight as a two-day Group of 20-summit meeting began in Seoul, the capital of the country. Coincidentally, Josef Ackermann, Deutsche Bank chairman and CEO, visited Seoul to attend a business forum jointly organized the summit.
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