Hong Kong jails 3 stock market manipulators for up to 80 months in landmark case

The stock price manipulation inflated investment company Ching Lee Holdings’ share price by as much as 2000 per cent, netting illicit profits of over US$15.9 million

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General view of the High Court in Admiralty. Photo: Sun Yeung

Published: 3:03pm, 22 Jul 2024Updated: 6:18pm, 22 Jul 2024

Three individuals were sentenced to up to six years and eight months in jail for manipulating shares of Ching Lee Holding, the Hong Kong High Court ruled on Monday, marking the city’s toughest crackdown yet on a pump and dump scheme.

Sit Yi-ki, Lam Wing-ki, and Tam Cheuk-hang were sentenced to between four years four months and six years eight months in jail, with the latter being the heaviest sentence ever imposed for such a criminal offence. They were found guilty in a landmark prosecution brought by the Securities and Futures Commission (SFC) in May.

The manipulation scheme is “a sophisticated and intricate conspiracy”, which has caused losses to genuine market participants and damage to Hong Kong’s reputation as a global financial centre, Douglas Yau Tak Hong, deputy judge of the Court of First Instance of the High Court, said during the sentencing.

“A fair and efficient stock market is the prerequisite for maintaining our competitiveness in the region.”

The maintenance of market order is of “paramount importance” for the people of Hong Kong, Yau said, while adding that the public should not be impacted by the trickle-down effects into the financial system, following such failures.

This landmark trial marks the first time an SFC case has been heard before a High Court jury, and the severity of these sentences reflects a significant milestone in the SFC’s efforts to combat market manipulation, the prosecutor said.

“It has sent a very strong and clear market message that we will not tolerate any form of similar wrongdoings,” said Christopher Wilson, the executive director of enforcement at SFC.