A prosecution team has been assigned a case of illegal short selling worth over 56 billion won, or around 43 million U.S. dollars, involving Hong Kong-based investment bank BNP Paribas and HSBC.

According to the legal community on Tuesday, the case has been handed to the second financial investigation division at the Seoul Southern District Prosecutors' Office.

Earlier this month, two local lawyers filed complaints against the two banks over allegations of violating the Financial Investment Services and Capital Markets Act.

The Financial Supervisory Service announced that it has confirmed naked short selling, the practice of selling without arranging a loaner asset that is illegal in South Korea, by BNP Paribas in Hong Kong on 101 stock items worth 40 billion won between September 2021 and May 2022.

Hong Kong-based HSBC was also found to have engaged in naked short selling nine stocks worth 16 billion won since August 2021.