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South Korea - Deutsche Bank feels the regulator's wrath over market manipulation
22 July 2011
Deutsche Bank was the first to feel the effect of more muscular Korean regulation but the wider market must now adapt to the change, says Elliot Wilson
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Korea
Deutsche Bank
DSK
Deutsche Bank could have had a worse year in Korea, but it is hard to imagine how. Earlier this year Deutsche Securities Korea (DSK), the German bank’s broking division, was slapped with a six-month ban preventing it from trading on its own account for six months until September 30.
Korea’s securities regulator, the Financial Services Commission (FSC), ruled that the firm had acted improperly by engaging in arbitrage trading between the spot and futures market on November 11 2010.
A group of five DSK traders – three in Hong Kong and one each in Seoul and New York – created a new style of derivative designed to ramp down the price of a basket of selected Korea-listed stocks on a particular day. In its ruling, the FSC noted that Deutsche traders had sold around W2.5trn ($2.3bn) worth of shares in the last few minutes of the...
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