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[Alpha Biz=(Chicago) Reporter Kim Jisun] Kiwoom Securities' account was abused for market price manipulation due to a lower margin of stocks compared to other securities firms amid an outstanding balance amounting to KRW 500 billion due to the lower limit of Youngpoong Paper.
According to the financial investment industry on the 23rd, Kiwoom Securities maintained its margin ratio at 40% until the 18th when the lower limit of Youngpoong Paper broke out, but adjusted it to 100% only on the 19th when transactions were suspended.
It was different from other securities firms such as Mirae Asset Securities, Korea Investment & Securities, NH Investment & Securities, Samsung Securities, KB Securities, and Shinhan Investment & Securities that raised the margin of Youngpoong Paper to 100% from early this year to July.
If a securities firm sets the margin ratio at 100%, the stock can be purchased only in cash, blocking attempted transactions. If you set the margin rate at 40%, you can buy 1 million won worth of stocks with 400,000 won in cash. The remaining 600,000 won can be paid before the actual stock is deposited into the account (two business days from the trading day).
However, if the outstanding amount is not paid by the payment date, the securities company is forced to dispose of the stock (counter-sale).
Youngpoong Paper (KRW 33,900) saw its stock price plunge 29.96% (KRW 14,500) on the 18th, and nearly KRW 500 billion in unpaid bills occurred at Kiwoom Securities as trading was suspended the next day.
Kiwoom Securities said in a public announcement after the market closed on the 20th that KRW 494.3 billion in unpaid payments were incurred from its customer trust account due to the lower limit of Youngpoong Paper (the lowest price limit). The outstanding balance 4943 billion won generated this time exceeds the net profit of Kiwoom Securities (425.8 billion won) in the first half of the year.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
