More than 20 hedge funds have been hit with fines in the last three months for trying to profit from Greece’s misery.
The mostly London-based funds, including George Soros’ Quantum Fund, are seeking profit from the Greek banks’ diving shares, the Financial Times reports. The Hellenic Republic Capital Market Commission has been handing out fines, claiming the “naked” short-selling of bank shares violates European regulations. Unlike traditional short selling, “naked” shorting involves selling shares of a company before having actually secured the right to borrow another investor’s shares. Writes the FT:
“The Greeks are shooting themselves in the foot,” said an executive at one of the hedge funds. “All these hedge funds have been helping to re-capitalise the Greek banks at a time when no one else would touch them.”
Politicians are calling the hedge funds greedy, and the hedge funds are trying to get out of the now more than €1 million in fines they owe. Greece hasn’t been consistent with European rules, the hedge funds say, and are interpreting regulations too strictly.
Photo: Dennis Jarvis via Flickr.