Three stock market traders were sentenced to up to six years and eight months in jail for manipulating shares of Ching Lee Holding, the Hong Kong High Court ruled on Monday, marking the city’s toughest crackdown yet on false trading of shares.
The manipulation scheme is “a sophisticated and intricate conspiracy”, which has caused losses to genuine market participants and damage to Hong Kong’s reputation as a global financial centre, Douglas Yau Tak Hong, deputy judge of the Court of First Instance of the High Court, said during the sentencing hearing.
“A fair and efficient stock market is the prerequisite for maintaining our competitiveness in the region.” The maintenance of market order is of “paramount importance” for the people of Hong Kong, Yau said, while adding that the public should not be impacted by the trickle-down effects into the financial system, following such failures.
The trading manipulation scheme was planned and commenced before Ching Lee’s initial public offering (IPO) on March 29, 2016, lasting for over five months. The conspirators artificially boosted turnover of the shares by conducting manipulative transactions among 156 securities accounts under their control, the judge said.
The manipulative activities inflated Ching Lee’s share price by as much as 2,000 per cent from the IPO price to HK$5.71 in August 2016, before a collapse of 90 per cent on September 7, 2016. The scheme netted illicit profits of more than HK$124 million (US$15.9 million).
Nelson Ho Ming Hin and Simon Suen Man, the other two individuals alleged to have been involved in the market manipulation case, are still at large and currently wanted by authorities.
