Short-selling charges for a hedge fund in the US have led to the resignation of two directors from the ASX.

Reports say Shane Finemore and Russell Aboud have announced they will leave the board of the Australian Securities Exchange after their hedge fund was fined by US regulators.

The $1.5 billion former UBS bankers’ fund called ‘Manikay’ was found to have improperly short-sold Citigroup shares in 2009, leading to an AU$2.83 million infringement fine.

Manikay was one of 23 caught in a crackdown by the Securities And Exchange Commission, the United States’ regulator. The fine reportedly includes all the profit the fund made from the deal, which breached rules placing a timeframe on re-purchasing shares after they are shorted.

ASX Chairman Rick Holliday-Smith thanked the two directors for their “valued contribution.”

“ASX has an ongoing program of board renewal and this process will now be used to find suitable replacements in the coming months,” the chairman said.

It is unclear what the two former executives’ roles were in the short-selling findings, but it is understood they removed themselves from the ASX to avoid damaging perceptions of it.