South Korean prosecutors have charged four Deutsche Bank employees with illegally manipulating Seoul’s stock market last year to earn more than US$40 million on a single day, a report said yesterday.
Yonhap news agency said the German bank’s Seoul securities unit and the four employees — including three foreign nationals — were accused of amassing 44.8 billion won (US$41.3 million) through illegal trading on the spot and futures markets.
Deutsche Bank said in a statement that it denied the charges and would defend itself in court, according to Dow Jones Newswires. The bank said it did not authorize or condone any breach of market regulation.
The bank’s Hong Kong unit and securities unit in Seoul have both been under investigation for alleged market manipulation and unfair transactions on Nov. 11 last year, an options expiry day.
On that day Seoul’s benchmark KOSPI share index fell 48 points in the session’s last 10 minutes as a result of arbitrage trading between the spot and futures markets. During that time about 2.4 trillion won (US$2.16 billion) in sell orders from foreign investors were processed, most of them through Deutsche Bank’s local securities unit.
The KOSPI ended the day 53.12 points, or 2.79 percent, lower at 1,914.73.
Prosecutors said Deutsche Bank’s securities unit in Seoul and the four employees knowingly placed heavy sell orders so as to pocket massive returns from put options, which were structured to generate profits if the KOSPI plunged.
“All profits they made illegally have been confiscated by the court,” Yonhap quoted chief prosecutor on the case, Lee Seok-hwan, as saying.
South Korea’s securities market — the world’s largest in terms of volume of stock index options trading — saw its stability and transparency “seriously damaged” by the scheme, he said.
Yonhap said three of the four charged employees were foreign nationals and included an executive in Hong Kong, while the fourth was a South Korean executive from the bank’s securities unit in Seoul.
The four have ignored summonses by prosecutors, who plan to ask Hong Kong authorities and Interpol to help extradite them if they refuse to appear in court, the agency said without specifying their current locations.
South Korea, in common with other developing markets, has grown increasingly concerned at the potential risks posed by rapid flows of foreign capital.
In January, authorities announced new rules designed to reduce the risk of sharp stock market volatility triggered by derivatives trading.
In February, Seoul financial authorities suspended some local Deutsche Bank operations for six months over the alleged market manipulation, the -toughest-ever penalty imposed against a foreign securities firm.
Alibaba Group Holding Ltd (阿里巴巴) founder Jack Ma (馬雲) has been living in Tokyo for almost six months after disappearing from public view following China’s crackdown on the tech sector, the Financial Times reported yesterday, citing multiple unnamed sources. The billionaire has kept a low profile since the crackdown, which has included Chinese regulators scrapping the initial public offering of Ma’s Ant Group Co (螞蟻集團) and issuing Alibaba with record fines. However, the Times said he has spent much of the past six months with his family in Tokyo and other parts of Japan, along with visits to the US and Israel. The
GLOBAL EXPANSION: The manufacturer said it increased its stake in the Chinese unit to 1.5 billion yuan and started rolling out electric Lordstown trucks at its Ohio plant Hon Hai Precision Industry Co (鴻海精密) has increased its investments in the Czech Republic and China by more than NT$6 billion (US$196 million) as part of its global expansion. The company, known as Foxconn Technology Group (富士康科技集團) internationally, has also begun shipping electric pickup trucks produced for US brand Lordstown Motors Corp. In a Taiwan Stock Exchange filing on Friday, Hon Hai said it has raised investments in its Czech subsidiary Foxteq CZ by US$58.98 million through its PCE Paragon Solutions Kft unit. In the Czech Republic, Hon Hai has a research-and-development center and a product design center, and it assembles monitors, cellphones,
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is to build a wafer fab deploying 1 nanometer (nm) process technology at the Longtan (龍潭) campus of Hsinchu Science Park (新竹科學園區), Hsinchu Science Park Bureau Director-General Wayne Wang (王永壯) said yesterday. The bureau completed a pilot project in the middle of last month for the third expansion phase of the Longtan Science Park (龍潭科學園區) in Taoyuan to accommodate the new TSMC plant, Wang told a news conference. The pilot expansion project has been submitted to the National Science and Technology Council, which would next forward the project to the Cabinet for approval, Wang said. “The efforts
California-based start-up OpenAI Inc has released a chatbot capable of answering a variety of questions, but its impressive performance has reopened the debate on the risks linked to artificial intelligence (AI) technologies. The conversations with ChatGPT, posted on Twitter by fascinated users, show a kind of omniscient machine, capable of explaining scientific concepts and writing scenes for a play, university dissertations or even functional lines of computer code. “Its answer to the question ‘what to do if someone has a heart attack’ was incredibly clear and relevant,” said Claude de Loupy, head of Syllabs, a French company specialized in automatic text generation. “When