Former Hong Kong Licensed Representative Charged for Conspiracy to Defraud in Securities Transactions, Total 8 Charged in Sophisticated Ramp & Dump Market Manipulation Scheme
19th April 2023 | Hong Kong
A former Hong Kong licensed representative (Leung Chung Yi) has been charged in Hong Kong court for conspiracy to defraud in securities transactions, with a total of 8 individuals charged in operating a sophisticated Ramp & Dump market manipulation scheme. Hong Kong Securities & Futures Commission (SFC): “An additional suspect was charged today, bringing the total number of persons charged in connection with a large-scale and sophisticated syndicate suspected of operating “ramp-and-dump” market manipulation to 8. Mr Leung Chung Yi, a former licensed representative of the SFC, appeared at the Eastern Magistracy today and he was charged with the offences of conspiracy to defraud and conspiracy to employ a scheme with intent to defraud or deceive in transactions involving securities under common law, section 300 of the Securities and Futures Ordinance and section 159A and 159C of the Crimes Ordinance. No plea was taken and the case was adjourned to 4 October 2023. The Court granted bail to Leung on these conditions: (i) not to leave Hong Kong; (ii) surrender all travel documents; (iii) report to police station on regular basis; and (iv) cash bail of $600,000.” More info below.
“ Former Hong Kong Licensed Representative Charged for Conspiracy to Defraud in Securities Transactions, Total 8 Charged in Sophisticated Ramp & Dump Market Manipulation Scheme “
Hong Kong Charged Core Member & 6 Others for Securities Fraud & Conspiracy in a Sophisticated Syndicate Operating Ramp & Dump Scheme, $82 Million Assets Frozen & Total of 21 Charged Following Investigations by Hong Kong SFC & Police
7th April 2023 – Hong Kong (Eastern Magistracy, Court) has charged a core member (Chow Chi Man) & 6 others for securities fraud & conspiracy in a sophisticated syndicate operating Ramp & Dump Scheme, with a total of $82 million assets frozen (HKD 650 million) and 21 charged following investigations by Hong Kong Securities & Futures Commission (SFC) & Hong Kong Police. Hong Kong SFC Executive Director of Enforcement, Christopher Wilson: “We will see to it that suspects of market misconduct are brought to justice and the integrity of Hong Kong’s financial market and the investing public are protected. To this end, we will not hesitate to deploy legal and regulatory tools at our disposal and continue our collaboration with the Police and other law enforcement agencies in combating financial crimes.” 4th April 2023 – “The Court today was informed that Ms Tse Yiu Chung (previously known as Tse Man Kwan), Mr Wu Hon Cheung, Ms Ng Ka Man and Mr Cheung Chak Ho are alleged to have conspired with a number of individuals, including those who had already been charged last September, to use multiple nominee accounts to corner the shares of two target stocks and drive up the prices of these stocks between September 2018 and April 2019. The syndicate is alleged to have induced investors to purchase shares in these stocks through social media platforms to facilitate their disposal of shares at a profit. The prices of these stocks collapsed in November 2018 and April 2019 once the demand was exhausted.” See below for more info.
Hong Kong Charged Core Member & 6 Others for Securities Fraud & Conspiracy in a Sophisticated Syndicate Operating Ramp & Dump Scheme
6 more charged in SFC and Police joint operation against sophisticated ramp-and-dump syndicate
4th April 2023 – 6 additional suspects – including key members and an alleged ringleader – were charged with various criminal offences following an earlier joint operation of the Securities and Futures Commission (SFC) and the Police against a large-scale and sophisticated syndicate suspected of operating “ramp-and-dump” market manipulation.
These suspects appeared at the Eastern Magistracy today. Four of them were charged with the offences of conspiracy to defraud and conspiracy to employ a scheme with intent to defraud or deceive in transactions involving securities under common law, section 300 of the Securities and Futures Ordinance and section 159A and 159C of the Crimes Ordinance and the rest were charged with money laundering related offences. No plea was taken and the case was adjourned to 4 October 2023. The Court granted bail to them on these conditions: (i) not to leave Hong Kong; (ii) surrender all travel documents; (iii) report to police station on regular basis; and (iv) cash bail ranging from $500,000 to $1 million.
The SFC’s Executive Director of Enforcement, Mr Christopher Wilson, said: “We will see to it that suspects of market misconduct are brought to justice and the integrity of Hong Kong’s financial market and the investing public are protected. To this end, we will not hesitate to deploy legal and regulatory tools at our disposal and continue our collaboration with the Police and other law enforcement agencies in combating financial crimes.”
The additional number of suspects charged bring to 20 the total number of people charged following a series of extensive investigations by the SFC and the Police on suspected “ramp-and-dump” stock investment schemes and suspected money laundering activities. In September and November last year, a total of 14 suspects, including the alleged ringleaders and key members of other “ramp-and-dump” syndicates, were charged with various criminal offences. In addition, the SFC has frozen the assets held in the securities trading accounts by members of these alleged syndicates at a total value to the tune of $650 million.
The Court today was informed that Ms Tse Yiu Chung (previously known as Tse Man Kwan), Mr Wu Hon Cheung, Ms Ng Ka Man and Mr Cheung Chak Ho are alleged to have conspired with a number of individuals, including those who had already been charged last September, to use multiple nominee accounts to corner the shares of two target stocks and drive up the prices of these stocks between September 2018 and April 2019. The syndicate is alleged to have induced investors to purchase shares in these stocks through social media platforms to facilitate their disposal of shares at a profit. The prices of these stocks collapsed in November 2018 and April 2019 once the demand was exhausted.
Suspected core member of syndicate charged in ramp-and-dump case
6th April 2023 – An additional suspected core member of a large-scale and sophisticated syndicate suspected of operating “ramp-and-dump” market manipulation was charged today after six suspects had been charged earlier with various criminal offences.
Mr Chow Chi Man appeared at the Eastern Magistracy today and he was charged with the offences of conspiracy to defraud and conspiracy to employ a scheme with intent to defraud or deceive in transactions involving securities under common law, section 300 of the Securities and Futures Ordinance and section 159A and 159C of the Crimes Ordinance. No plea was taken and the case was adjourned to 4 October 2023. The Court granted bail to Chow on these conditions: (i) not to leave Hong Kong; (ii) surrender all travel documents; (iii) report to police station on regular basis; and (iv) cash bail of $500,000. The latest legal proceedings bring to 21 the total number of people charged following a series of extensive investigations by the SFC and the Police into suspected “ramp-and-dump” stock investment schemes and suspected money laundering activities.
Hong Kong SFC & ICAC Arrested 5 Members of $24 Million Ramp & Dump Scheme, Key Members Include Senior Executives of Hong Kong Listed-Companies & Qualified Accountants
16th March 2023 – Hong Kong Securities & Futures Commission (SFC) & ICAC have arrested 5 members of a $24 million (HKD 191 million) Ramp & Dump Scheme, with key members including senior executives of Hong Kong listed-companies & qualified accountants arrested (14/3 & 15/3). Hong Kong SFC & ICAC: “The sophisticated syndicate is suspected of operating ramp-and-dump market manipulation involving illicit gains of HKD 191 million through a complex shareholding network of Hong Kong-listed companies by corrupt means. 8 other members of the syndicate were earlier arrested in another joint operation of the SFC and the ICAC. The 5 arrestees are key members of the syndicate, including qualified accountants and senior executives of a number of Hong Kong-listed companies. The joint operation of the SFC and the ICAC involved searches of various premises, including the offices and the residences of the arrestees. Intensive investigations by the SFC and the ICAC also revealed other criminal offences, including perverting the course of public justice and obstructing the SFC’s investigations ” See below for more info.
” Hong Kong SFC & ICAC Arrested 5 Members of $24 Million Ramp & Dump Scheme, Key Members Include Senior Executives of Hong Kong Listed-Companies & Qualified Accountants “
The SFC’s Executive Director of Enforcement, Mr Christopher Wilson: “The joint operation demonstrated our determination to tackle any form of corruption-facilitated market misconduct and zero tolerance of wrongdoers attempting to obstruct our investigations and pervert the course of justice. We are committed to work with the ICAC to root out misconduct and uphold Hong Kong’s reputation as an international financial market.”
Deputy Commissioner and Head of Operations of the ICAC, Mr Ricky Yau Shu-chun: “The ICAC would not tolerate corruption or any illegal acts frustrating investigations by the Commission. We will continue to collaborate with the SFC to track down the corrupt so as to sustain Hong Kong’s status as a clean international financial centre. Perverting the course of public justice is a serious offence. The ICAC would follow up on breaches of such offence in a serious manner.”
Under section 382 of the Securities and Futures Ordinance (SFO), it is a criminal offence if a person, without reasonable excuse, obstructs the SFC in performance of the statutory vested by the SFO. The maximum penalty on indictment is two years imprisonment and a fine of $1 million. Under section 101I of the Criminal Procedure Ordinance, if a person is convicted of an offence of perverting the course of justice at common law, he shall be liable to be sentenced at the discretion of the court to imprisonment for any term and a fine of any amount.
Hong Kong SFC & ICAC Conducted Joint Search on $24 Million Ramp & Dump Scheme of 6 Hong Kong Listco & Arrested 8 Including Listco Chairman, 50 Premises Searched by 190 Officers
11th November 2022 – Hong Kong Securities & Futures Commission (SFC) & ICAC have conducted a joint search operations of a $24 million (HKD 191 million) Ramp & Dump Scheme of 6 Hong Kong listed companies, arresting 8 including a Hong Kong listed company Chairman and a suspected ringleader. The operation involves a total of 190 officers, with 120 SFC officers and 70 ICAC officers, searching a total of 50 premises (Search warrants included offices of certain Hong Kong-listed companies and SFC-licensed brokers). Hong Kong SFC & ICAC: “The SFC conducted the search in relation to suspected ramp-and-dump schemes involving the stocks of six Hong Kong-listed companies and other market misconduct under the Securities and Futures Ordinance (SFO). The ICAC conducted the search and made the arrests for suspected corruption offences under the Prevention of Bribery Ordinance. The joint operation was the result of the SFC’s initial discovery of suspicious trading activities of the syndicate in intensive investigations and referral of the case to the ICAC because of suspected corruption offences in addition to specific market misconduct offences under the SFO. The syndicate is suspected to have offered bribes to the responsible officers and staff members of brokers for providing assistance in share placing so as to facilitate the ramp-and-dump schemes.” No further comment will be made at this stage as investigations are ongoing. ICAC ~ Independent Commission Against Corruption (Hong Kong)
SFC’s Executive Director of Enforcement, Christopher Wilson: “Combating social media ramp-and-dump schemes has been and remains one of the top enforcement priorities of the SFC. The latest enforcement action sends a clear message to the public that the SFC has zero tolerance of the active participation of shareholders and senior executives of listed companies, as well as SFC-licensed individuals, in these manipulative schemes because of the harm of their misconduct to the interests of minority shareholders and the reputation of Hong Kong’s financial markets. The joint operation demonstrated the continuous close collaboration between the SFC and the ICAC to tackle complex and serious financial crimes to protect the investing public and maintain the integrity of Hong Kong’s financial markets.” No further comment will be made at this stage as investigations are ongoing. ICAC ~ Independent Commission Against Corruption (Hong Kong)
Deputy Commissioner & Head of Operations of the ICAC, Ricky Yau Shu-chun: “Corruption-facilitated market misconduct is intrinsically sophisticated, which required the concerted efforts and expertise of both the ICAC and the SFC to tackle. The ICAC and the SFC will continue to collaborate and work in partnership to combat such illicit activities to sustain Hong Kong’s status as a clean international financial centre.”
Ramp-and-dump scheme is a form of market manipulation where fraudsters use different means to “ramp” up the share price of a listed company and then “dump” the shares to other investors at an artificially high price. The fraudsters also used social media platform to lure the unsuspecting investors to buy the shares at an artificially high price while the syndicate members were offloading for profit leaving innocent victims with substantial financial losses.
The joint operation was conducted under the arrangement of the Memorandum of Understanding signed between the SFC and the ICAC. Please see the websites of the SFC and the ICAC.
Hong Kong SFC Statement
SFC and ICAC joint operation against sophisticated ramp-and-dump syndicate
Nov 2022 – 8 people including a suspected ringleader of a sophisticated syndicate operating ramp-and-dump schemes through a complex cross-shareholding network of Hong Kong-listed companies involving illicit gains of $191 million – were arrested in a joint operation of the Securities and Futures Commission (SFC) and the Independent Commission Against Corruption (ICAC) mounted in the past two days (9 and 10 November) (Notes 1 & 2).
Other arrestees are also key members of the syndicate including the chairperson of a Hong Kong-listed company and three responsible officers of two brokers.
More than 120 SFC officers and 70 ICAC officers participated in the joint operation during which a total of 50 premises were searched including over 20 jointly searched by the SFC and the ICAC. The premises covered by search warrants obtained by the SFC and the ICAC included offices of certain Hong Kong-listed companies and SFC-licensed brokers.
The SFC conducted the search in relation to suspected ramp-and-dump schemes involving the stocks of six Hong Kong-listed companies and other market misconduct under the Securities and Futures Ordinance (SFO). The ICAC conducted the search and made the arrests for suspected corruption offences under the Prevention of Bribery Ordinance.
The joint operation was the result of the SFC’s initial discovery of suspicious trading activities of the syndicate in intensive investigations and referral of the case to the ICAC because of suspected corruption offences in addition to specific market misconduct offences under the SFO. The syndicate is suspected to have offered bribes to the responsible officers and staff members of brokers for providing assistance in share placing so as to facilitate the ramp-and-dump schemes.
No further comment will be made at this stage as investigations are ongoing.
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