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TAIPEI, May 5 (Reuters) - Taiwan's financial regulators said on Monday they will file a suit against Glaucus Research Group over "maliciously spreading rumor" against Asia Plastic , its first such move against a foreign company.
Short-seller Glaucus issued a research report in late April, saying that Asia Plastic's financial reports were inflated, dragging down shares of the company by almost 35 percent in less than two weeks.
"We have made sure the research report was not factual... It has caused instability to the shares and the local stock market," William Tseng of the Financial Supervisory Commission (FSC) told reporters.
According to Taiwan's securities law, the most serious penalty would be up to 10 years in prison, Tseng said.
Shares of Asia Plastics were 7 percent limit up on the news. (Reporting by Faith Hung; Editing by Kim Coghill)