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
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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