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SFC issues restriction notices to 15 brokers to freeze client accounts linked to suspected social media ramp-and-dump scam

Issue date: 2021-03-15 18:10:30

The Securities and Futures Commission (SFC) has issued restriction notices to 15 brokers, prohibiting them from dealing with or processing certain assets held in 32 trading accounts, which are related to a suspected social media ramp-and-dump scam involving the manipulation of the market in the shares of a company listed on The Stock Exchange of Hong Kong Limited between November 2019 and November 2020 (Notes 1 & 2).

The 15 brokerages are: Canfield Securities Company Limited, China Galaxy International Securities (Hong Kong) Co., Limited, China Tonghai Securities Limited, Emperor Securities Limited, Enhanced Securities Limited, Enlighten Securities Limited, Futu Securities International (Hong Kong) Limited, Huatai Financial Holdings (Hong Kong) Limited, I Win Securities Limited, KGI Asia Limited, Riches Depot Securities Co., Limited, Solomon Securities Limited, Sun Hung Kai Investment Services Limited, Sun International Securities Limited and Yuzhou Financial Holdings Limited.

The restriction notices prohibit them, 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, any assets in any way in the trading accounts up to a certain amount, including: (i) entering into transactions to acquire securities; (ii) processing any withdrawals or transfers of securities and/or cash or any transfers of money arising from the disposal of securities; (iii) disposing of or dealing with any securities and/or cash on the instructions of any authorized person of the accounts or any person acting on client’s behalf; and (iv) assisting another person to deal with any relevant property in a specified manner or other than in a specified manner.  The brokers are also required to notify the SFC if they receive any of these instructions.

The SFC considers that the issue of the restriction notices is desirable in the interest of the investing public or in the public interest.

The SFC’s investigation is continuing.

End

Notes:

1. The SFC issued the restriction notices pursuant to sections 204 and 205 of the Securities and Futures Ordinance.
2. A social media ramp-and-dump scam is a form of stock market manipulation where fraudsters use different means to “ramp” up the share price of a listed company and then induce investors via social media platforms to purchase the shares they “dump” at an artificially high price.

News captured as of:2021-03-15 18:10:30

Source: SFC