The logo for Morgan Stanley is seen on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, N.Y., Aug. 3, 2021. Reuters-Yonhap

The Korea Exchange is probing a local unit of Morgan Stanley over placing a sell order of SK hynix shares, as the order was placed two days before the investment bank issued a report that downgraded its rating on the chipmaker, an industry source said Friday.

The Seoul branch of Morgan Stanley placed an order to sell some 1.01 million shares of SK hynix on Sept. 13, compared with an order to sell about 350,000 shares of the chipmaker a day before, according to the source.

On Sunday, Morgan Stanley published the report that cut its target price of SK hynix shares to 120,000 won ($90.12) from 260,000 won and downgraded its rating on the chipmaker, citing bleaker price outlooks for memory chips.

Korea's stock market was closed from Monday and Wednesday due to the Chuseok holiday, and shares of SK hynix dropped 6.14 percent Thursday.

If the probe finds any irregularities, the bourse operator will refer the case to the Financial Supervisory Service, the nation's financial regulator, the source said. (Yonhap)