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SFC issues restriction notice to freeze broker’s client accounts linked to suspected market manipulation

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The Securities and Futures Commission (SFC) has issued a restriction notice to Shenwan Hongyuan Securities (H.K.) Limited (Shenwan Hongyuan), prohibiting it from dealing with or processing certain assets held in four trading accounts, which are related to suspected market manipulation in the shares of a company listed on the Stock Exchange of Hong Kong Limited (Notes 1 & 2).

The restriction notice prohibits Shenwan Hongyuan, without the SFC’s prior written consent, from disposing of or dealing with, or assisting, counselling or procuring another person to dispose of or deal with, certain securities (Securities) in the four trading accounts including: (i) entering into transactions in respect of the Securities; (ii) processing any withdrawals or transfers of the Securities and/or cash or any transfers of money arising from the disposal of the Securities; and (iii) disposing of or dealing with the Securities on the instructions of any authorized person of the accounts or any person acting on their behalf.  Shenwan Hongyuan is also required to notify the SFC if they receive any of these instructions.

The SFC considers that the issue of the restriction notice is desirable in the interest of the investing public and in the public interest.

The SFC’s investigation is continuing.

Notes:

  1. The SFC issued the restriction notice pursuant to sections 204 and 205 of the Securities and Futures Ordinance (SFO).
  2. Shenwan Hongyuan is a corporation licensed under the SFO to carry on business in Type 1 regulated activity.

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Regulator Information

Abbreviation: SFC
Jurisdiction: Hong Kong

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