SFC and ICAC joint operation against suspected market manipulation syndicate
Involving ramps in the shares of 2 unnamed listed companies. We can tell you that one is Alliance International Education Leasing (1563), where the bubble has already burst, and the other is probably MOG Digitech (1942), which is still in a bubble. The SFC has issued Restriction Notices issued to 6 brokers to freeze certain client accounts.
SFC and ICAC conduct joint operation against suspected market manipulation syndicate and Restriction Notices issued by the SFC to six brokers to freeze client accounts
Issue date: 2023-08-29 17:11:36
The Securities and Futures Commission (SFC) and the Independent Commission Against Corruption (ICAC) conducted a joint operation today involving two companies listed on The Stock Exchange of Hong Kong Limited on suspicion that their shares were being manipulated from December 2022 to August 2023 (Note 1).
The SFC and the ICAC searched 14 premises suspected of links to the market manipulation case. In the joint operation, the ICAC also arrested one core member of the suspected syndicate under the Prevention of Bribery Ordinance.
The investigation revealed that an extremely well-organised syndicate was suspected of orchestrating a scheme to ramp up the share prices of the two aforesaid listed companies, thus breaching relevant provisions of the Securities and Futures Ordinance (SFO). The SFC suspected that the ultimate purpose of the scheme was to inflate the market capitalisation of the two listed companies to facilitate their selection as constituents of major market indices and for the syndicate to make a profit by selling their shares of the listed companies to index tracking funds at inflated prices.
To facilitate the operation of the scheme, the arrested core syndicate member was suspected to have bribed two senior executives of one of the two listed companies into disseminating false and misleading information about the company.
In connection with the joint operation, the SFC has issued restriction notices to six brokers, prohibiting them from dealing with or processing assets held in eight trading accounts which are related to suspected market manipulation of the shares of one of the two listed companies (Note 2).
The six brokerages are: Fulbright Securities Limited; Futu Securities International (Hong Kong) Limited; Grand China Securities Limited; Lee Go Securities Limited; Valuable Capital Limited; and Zinvest Global Limited.
The SFC is not investigating the six brokers, and all of them have cooperated with the SFC’s investigation. The restriction notices do not affect their operations or their other clients.
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 restriction notices prohibit the six brokers, 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 in respect of any securities; (ii) processing any withdrawals or transfers of securities and/or cash on the instructions of any authorised person of the accounts or by any person acting on their behalf; (iii) disposing of or dealing with any securities and/or cash on the instructions of any authorised person of the accounts or by any person acting on their behalf; and/or (iv) assisting another person to dispose of any relevant property or deal with any relevant property in a specified manner. The brokers are also required to notify the SFC if they receive any of these instructions.
No further comment will be made as investigations are ongoing.
- 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.
- The SFC issued the restriction notices pursuant to sections 204 and 205 of the SFO.
- Alliance International Education Leasing Holdings Limited 友聯國際教育租賃控股有限公司
- FULBRIGHT SECURITIES LIMITED 富昌證券有限公司
- Futu Securities International (HONG KONG) Limited 富途證券國際(香港)有限公司
- Grand China Securities Limited 華業證券有限公司
- LEE GO SECURITIES LIMITED 利高證券有限公司
- MOG Digitech Holdings Limited (KY) 馬可數字科技控股有限公司
- VALUABLE CAPITAL LIMITED 華盛資本証券有限公司
- Zinvest Global Limited 尊嘉證券國際有限公司