On 6 August 2024, in a move against financial fraud, Mr. Cheng Ming, a suspected core member of a sophisticated ramp-and-dump syndicate, was charged with conspiracy to defraud at the Eastern Magistracy. This charge follows his arrest on 5 August 2024 in a meticulously coordinated joint operation conducted by the Securities and Futures Commission (SFC) and the Hong Kong Police. Cheng, who had been evading authorities since October 2022, is a key figure in a complex scheme that involved manipulating stock prices to deceive investors into purchasing shares at artificially high prices. This operation led to the arrest of multiple individuals and the freezing of $860 million in assets.

Cheng’s capture came after a tip-off from a vigilant member of the public. This development is part of a broader investigation that has already seen eleven other individuals, including the alleged masterminds, charged and awaiting trial in the District Court.

The 55-year-old Cheng Ming, whose identity had been prominently displayed on the SFC’s “Have you seen these people?” page, was apprehended and produced in Court. Cheng appeared in court today, but no plea was taken, and the case was adjourned to 8 October 2024. He was released on bail under stringent conditions, including a cash bail of $500,000 and a prohibition on leaving Hong Kong.

Mr. Christopher Wilson, the SFC’s Executive Director of Enforcement, issued a statement highlighting the importance of public cooperation in such cases and said: “The successful arrest of the suspect demonstrates our close collaboration with the Police and the importance of cooperation from the public in providing the SFC with useful information and intelligence to bring suspected wrongdoers to justice.” He added, “We would also like to urge the public to report to the SFC as soon as possible any suspicious persons who have been placed on the SFC’s watchlist as such information may be helpful in enabling us to carry out further action without delay.”

The foundation for cooperations was laid on 25 August 2017, when the SFC and the Hong Kong Police formalized their collaboration by signing a Memorandum of Understanding (MoU). This agreement established a robust framework for joint investigations, case referrals, and mutual investigative assistance, significantly enhancing the regulatory and enforcement capabilities of both entities.

On 5 March 2021, this collaboration bore fruit when the SFC and HKP conducted a major joint operation against the sophisticated syndicate involved in ramp-and-dump schemes. These schemes manipulated stock prices to lure investors into buying shares at artificially inflated prices, resulting in significant profits for the fraudsters and substantial losses for the victims. Further legal proceedings ensued on 30 September 2022, when thirteen suspects were charged with various offences, including conspiracy to defraud and market manipulation. Some were also charged with money laundering, having manipulated the share prices of two Hong Kong-listed companies using multiple nominee accounts and social media platforms. On 24 November 2022, another significant development occurred when Mr. Tam Siu Ki, a suspected ringleader, was charged with similar offences and released on $1 million bail with following other conditions: (i) not to leave Hong Kong; (ii) surrender all travel documents; (iii) report to police station on a regular basis; and (iv) reside at the reported residential address and inform the Police in advance of any change of residential address to set a strict precedent to address such market manipulation.

By 19 June 2024, three major ramp-and-dump cases had been transferred to the District Court, involving 18 defendants. These cases targeted the shares of Eggriculture Foods Limited, Fullwealth Construction Holdings Company Limited, and KNT Holdings Limited. The defendants were granted bail under stringent conditions to ensure their compliance with the legal process. On 9 July 2024, the District Court held the first hearings of these cases, maintaining stringent bail conditions despite attempts by some defendants to relax them.

The arrest of Cheng Ming on 5 August 2024 marks a significant milestone in the SFC’s continuous efforts to combat financial fraud. The SFC’s proactive approach, strategic foresight, and close collaboration with the Police have been crucial in tackling such complex financial crimes. It also highlights the importance of public vigilance and cooperation in reporting suspicious activities, which played a vital role in the SFC’s enforcement actions.

Cheng Ming and the involved members of the syndicate has been charged with conspiracy to defraud, following arrests. Eleven other syndicate members, including the suspected masterminds, have been charged previously and will face trial in the District Court. No plea was taken today, and the case has been adjourned to 8 October 2024. Cheng was released on bail under stringent conditions, including a $500,000 cash bail, not leaving Hong Kong, surrendering all travel documents, reporting regularly to a police station, and residing at his reported residential address while informing the Police in advance of any change of address. The legal proceedings will continue as the authorities aim to bring all involved parties to justice.

(Source:

https://apps.sfc.hk/edistributionWeb/gateway/EN/news-and-announcements/news/doc?refNo=24PR132

https://apps.sfc.hk/edistributionWeb/gateway/EN/news-and-announcements/news/doc?refNo=24PR131

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