Updates

On 6 August 2024, in a move against financial fraud, Mr. Cheng Ming, a suspected core member of a ramp-and-dump syndicate, was charged with conspiracy to defraud at Hong Kong’s Eastern Magistracy. This charge follows his arrest on 5 August 2024 in a coordinated joint operation conducted by the Hong Kong’s Securities and Futures Commission (HK SFC) and the Hong Kong Police (HKP). Cheng Ming, whose identity had been prominently displayed on the SFC’s “Have you seen these people?” page, was apprehended and appeared in Court. He is allegedly involved in 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 HK $860 million in assets.

Cheng’s arrest came after a tip-off from a member of the public and is part of a broader investigation and apprehension that has already seen eleven other individuals charged and awaiting trial in the Hong Kong District Court.

Cheng Ming appeared in court on 6 August 2024, but no plea was taken, and the case was adjourned to 8 October 2024. He was released on bail under several conditions, including a cash bail of HK $500,000 and others including (i) prohibition on leaving Hong Kong; (ii) surrendering all travel documents; (iii) reporting to a police station on a regular basis; and (iv) residing at the reported residential address and informing the HK Police in advance of any change of residential address 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 basis for cooperation between the HK SFC and HK Police was laid down on 25 August 2017, when the HK SFC and the Hong Kong Police formalized their collaboration by signing a Memorandum of Understanding (MoU). This MoU established a framework for joint investigations, case referrals, and mutual investigative assistance to enhance the regulatory and enforcement capabilities of the HK SFC and the HK Police.

On 5 March 2021, working in collaboration, the HK SFC and HK Police conducted a joint operation against the syndicate involved in ramp-and-dump schemes. These schemes manipulated stock prices to induce investors into buying shares at artificially inflated prices, resulting in profits for the fraudsters and losses for the victims. Further legal proceedings ensued on 30 September 2022, when thirteen alleged 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 development occurred when Mr. Tam Siu Ki, an alleged ringleader, was charged with similar offences and released on bail under several conditions, including cash bail of HK$1 million and prohibition from leaving Hong Kong among others.

By 19 June 2024, three major ramp-and-dump cases had been transferred to the Hong Kong District Court, involving 18 defendants. These cases are in relation to the shares of Eggriculture Foods Limited, Full wealth Construction Holdings Company Limited, and KNT Holdings Limited. The defendants were granted bail under strict conditions. And on 9 July 2024, the District Court held the first hearings of these cases, maintaining strict bail conditions.

The arrest of Cheng Ming on 5 August 2024 seems like an important event in the collaborative efforts of HK SFC’s and HK Police as he is alleged to be the mastermind behind these fraudulent schemes.

Cheng Ming and the involved members of the syndicate have been charged with conspiracy to defraud, following arrests. Eleven other syndicate members, have been charged previously and will face trial in the District Court. No plea was taken on 6 August 2024 and the case has been adjourned to 8 October 2024. Even though all alleged involved members of the syndicate have been released on bail under strict conditions, including cash bail ranging from HK$ 1 million to HK$500,000, prohibition on leaving Hong Kong, surrendering all travel documents, reporting regularly to a police station, and residing at their reported residential address while informing the HK Police in advance of any change of address. The legal proceedings will continue on 8 October 2024.