South Korea is sending investigators to Deutsche Bank’s Hong Kong offices due to a massive plunge in the Kospi Index that happened on November 11, Bloomberg reports.
South Korea’s regulator “needs to have “conversations” with Deutsche Bank employees in the city,” a spokeswoman said.
Seoul is sending five investigators over a two period to question bankers.
Apparently one of the reasons the bank is in trouble, is because they filed a report on their computer-driven trades one minute late on Nov. 11, which contravenes South Korea’s stock exchange rules.
The Kospi tumbled 2.7 per cent on Nov. 11, the exchange’s last options expiry date. Korea Exchange Inc. attributed the drop, the index’s biggest since May 25, to “program” selling and began an investigation with regulators that includes sell orders made through Deutsche Bank.
About 1.6 trillion won ($1.4 billion) worth of sell orders on Nov. 11 were made through Deutsche Bank, South Korean regulators said the day after the stock plunge. The Kospi slumped 48 points to 1,914.73 between 2:59 p.m. and 3:01 p.m. in Seoul that day.
Deutsche Bank declined to comment.
Seoul’s policy-making body, said it may limit the number of stock-option contracts investors can own in the wake of the incident.
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