Updates

On 22 July 2024, the Hong Kong Court of First Instance sentenced Ms. Sit Yi Ki and Mr. Tam Cheuk Hang to six years and eight months in prison, and Ms. Lam Wing Ki to four years and four months, following their conviction in a jury trial for conspiracy to carry out false trading in the shares of Ching Lee Holdings Limited. This verdict follows extensive investigations by the Securities and Futures Commission (SFC) and prosecution by the Department of Justice.

This case concluded on 29 May 2024 with a 22-day jury trial, marking the first instance an offence under the Hong Kong Securities and Futures Ordinance (HK SFO) had been tried at the Hong Kong Court of First Instance. The nine-member jury unanimously found Sit and Tam guilty of conspiracy to commit false trading, while Lam was found guilty by a majority verdict.

The SFC’s investigations uncovered that between March 2016 and September 2016, Sit, Lam, Tam, and other co-conspirators orchestrated a complex scheme to manipulate the market. They conducted transactions among 156 securities accounts under their control, creating a deceptive appearance of active trading and artificially inflating the trading volume for Ching Lee shares. This fraudulent activity generated illicit profits exceeding HK$124 million.

Deputy High Court Judge Douglas Yau, in his sentencing remarks, emphasised the intricately planned nature of the conspiracy, underscoring its scale, sophistication, and international dimensions. He highlighted the paramount importance of deterrence and punishment in preserving the integrity of Hong Kong as an international financial centre.

Christopher Wilson, the HK SFC’s Executive Director of Enforcement, remarked, “The severity of these sentences reflects the Court’s stringent stance on misconduct detrimental to the reputation and integrity of Hong Kong’s securities and futures markets. This sends a resounding message to potential wrongdoers that market manipulation will be met with severe legal consequences.”

In conjunction with the criminal proceedings, the HK SFC has initiated proceedings under Section 213 HK SFO against various local and international corporations and individuals, including Sit, Lam, and Tam. These proceedings aim to disgorge their profits from the manipulative scheme and restore affected parties to their pre-transaction positions. The HK SFC has secured interim injunctions to freeze assets totaling up to HK$124.9 million, representing the combined profits derived from the fraudulent trading activities.

The SFC acknowledged the assistance of numerous international regulatory and law enforcement agencies, including the China Securities Regulatory Commission, the Hong Kong Independent Commission Against Corruption, the Monetary Authority of Singapore, the Ontario Securities Commission, the Singapore Police Force, the United Kingdom Financial Conduct Authority, and the U.S. Securities and Exchange Commission.

(Source: Market Manipulation Case)