The SFC has started criminal proceedings against five individuals for conspiring to carry out false trading in the shares of Ching Lee Holdings Limited (Ching Lee).
This case, on track for a committal to the Court of First Instance for a trial by jury, will become the first of its kind at the Court of First Instance of a criminal prosecution for an offence under the Securities and Futures Ordinance (SFO) (Note 1).
The SFC alleges that between 29 March 2016 and 7 September 2016, the five defendants – Ms Sit Yi Ki, Ms Lam Wing Ki, Mr Tam Cheuk Hang, Mr Simon Suen Man and Mr Ho Ming Hin – conspired to create a false or misleading appearance of active market in respect of the Ching Lee shares, contrary to sections 295 and 303 of the SFO and section 159A of the Crimes Ordinance.
Three defendants – Sit, Lam and Tam – appeared today at the Eastern Magistracy. No plea was taken and the case was adjourned to 24 September 2020.
The Court granted each of the three defendants court bail of $10,000. They are not allowed to leave Hong Kong.
The SFC has also commenced proceedings under section 213 of the SFO against the defendants and various local and overseas individuals of the alleged market manipulation (Note 2).
The SFC’s Executive Director of Enforcement, Mr Thomas Atkinson, said: “The SFC is committed to combating market misconduct and has zero tolerance of market manipulation in any shape or form. We will continue to use all available recourse to hold the perpetrators accountable in order to protect the investing public and Hong Kong’s reputation as an international financial centre” (Note 3).
- The SFC is only empowered to prosecute offences under the SFO in the Magistrates Court where lower penalties can be imposed. The SFC has referred the case to the Department of Justice which has the authority to prosecute offences under the SFO in the District Court and the Court of First Instance. The maximum penalty for market manipulation is imprisonment of 10 years and a fine of $10 million.
- Please see SFC press release dated 27 August 2019 for details.
- To cope with the increasingly complicated and well-organized crime, the SFC has formed a cross-divisional task force involving Intermediaries Division, Corporate Finance Division and Enforcement Division (I-C-E) to tackle the serious and high impact market manipulation networks as part of our front-loaded regulatory approach.