Morgan Stanley’s SK Hynix Sell Order Reviewed by Korea Watchdog

South Korea’s financial watchdog is looking into Morgan Stanley’s order to sell SK Hynix Inc. shares before research analysts at the bank cut their recommendation on the stock, another sign of the country’s increased scrutiny of global banks and hedge funds.

The Financial Supervisory Service has asked Morgan Stanley Seoul to submit documents for an examination into whether the US firm complied with regulations around a research report dated Sept. 15 that downgraded Korean memory chipmaker SK Hynix’s stock, according to an FSS spokesperson.

South Korea’s capital markets laws prohibit publishers of market analysis from trading financial products subject to ...