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Posted On: 11/29/2018 8:46:23 PM
Post# of 72436
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Naked short selling is alive and well, despite the contentions otherwise by some of our posters.
From today's Finimize newsletter:
From today's Finimize newsletter:
Quote:
What’s Going On Here?
South Korea’s financial regulator handed out its biggest-ever fine on Wednesday, ordering Goldman Sachs to pay $6.7 million for illegal trading practices in the latest blow to the investment bank’s scandal-hit Asian divisions.
What Does This Mean?
Goldman’s been punished for practicing “naked” short-selling, a particularly risky way of betting against a company’s stock price. Whereas normal short-selling involves borrowing the stock you’re betting against, naked short-selling goes commando: you’re selling shares you don’t actually have. The practice is illegal in many countries, including South Korea – but that didn’t stop Goldman making about $35 million worth of naked trades there.
The fine is yet another headache for the investment bank, which is currently mired in the gigantic 1MDB corruption scandal. 1MDB isn’t a boyband; it’s a Malaysian state investment fund that was allegedly looted by the former Malaysian Prime Minister and his pals – to the tune of $4.5 billion, according to the US government. Goldman, which was paid $600 million for helping sell the fund’s bonds, is being investigated for its involvement. The former chairman of Goldman’s Southeast Asia branch has already pleaded guilty to charges of money laundering and bribery.
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