Business

Deutsche Bank gets 1bn won fine after Korea market fix

Deutsche Bank building
Image caption Deutsche Bank has said it will cooperate with Korean authorities

Deutsche Bank has been fined 1bn won ($887,000) after South Korea's regulators said its staff manipulated the country's stock market.

The fine is the largest ever handed down by Korea's stock exchange, KRX.

On Thursday, the Financial Services Commission (FSC) said Deutsche Bank staff colluded to force down the value of the stock index so that they could profit illegally.

Deutsche Bank said it was "disappointed" with the FSC's findings.

Closing rush?

The FSC started its investigation into Deutsche Bank's staff after the main KOSPI stock index fell 2.8% in the last 10 minutes of trade on 11 November.

That drop earned the staff profits of about 44.9bn won, the regulators claim.

According to the FSC, Deutsche Bank employees had built up large positions in derivatives that allowed them to influence the market.

The regulators say Deutsche Bank employees pushed through $2.2bn (£1.4bn) worth of trades during the last 10 minutes of trading on the KOSPI

Prosecution

On Thursday, the FSC banned Deutsche Bank from trading certain securities and derivatives.

It now also wants five Deutsche Bank employees prosecuted.

The FSC said the employees are based in the company's Hong Kong, New York and Seoul offices, but did not give their names.

Deutsche Bank said it would cooperate with South Korean authorities.

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