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By Faith Hung
TAIPEI May 5 Taiwan's financial regulators said
on Monday they will file a suit against California-based Glaucus
Research Group over "maliciously spreading rumors" against Asia
Plastic, its first such move against a foreign
Short-seller Glaucus initiated coverage with a strong sell
rating on Asia Plastic in late April, saying its financial
reports were inflated. The report dragged down shares of the
company by almost 35 percent in less than two weeks.
Under Taiwan's securities law, the most serious penalties
for such an offence would be up to 10 years in prison and the
company could be barred from conducting activies in Taiwan,
Financial Supervistory Commission Chairman William Tseng said.
"We have made sure the research report was not factual... It
has caused instability to the shares and the local stock
market," Tseng told reporters.
Glaucus is well known for shorting stocks. Hong Kong-listed
shares of Chinese child skincare products producer Prince Frog
International slid as much as 12 percent on Oct 16
after the short-seller initiated coverage of the company with a
"strong sell" rating.
Glaucus does not have an office in Taiwan, but the FSC can
sue the company as the research report was issued in Taiwan,
Shares of Asia Plastics were 7 percent limit up on the news.
Glaucus did not reply immediately to emails from Reuters.
(Editing by Kim Coghill)