The Court of First Instance of Hong Kong today convicted three people, Ms Sit Yi Ki, Ms Lam Wing Ki and Mr Tam Cheuk Hang of conspiracy to carry out fraudulent trading in the shares of Ching Lee Holdings Limited following a market manipulation trial 22 days by juries.
The prosecution was brought by the Ministry of Justice following extensive investigations by the SFC. It is also the first time that an offense under the Securities and Futures Ordinance (SFO) has been heard in the Court of First Instance.
The nine-judge jury at the trial court unanimously found Sit and Tam guilty of conspiracy to commit false trading. Jurors also returned a guilty verdict against Lam by a majority.
The prosecution arose out of SFC investigations which revealed that between March 2016 and September 2016, Sit, Lam and Tam conspired together with Ho Ming Hin, Simon Suen Man and other unidentified persons to carry out a complex market manipulation scheme.
They conspired to maintain an artificial turnover of Ching Lee shares by conducting manipulative trades between 156 securities accounts under their control. This resulted in a false or misleading appearance of active trading and an artificial increase in trading volume for Ching Lee’s shares. The trade manipulation activities took place over a period of more than five months in 2016 and generated more than $124 million in illegal profits.
The Court adjourned the case to June 17, 2024 for sentencing. The three accused applied for bail but their applications were rejected by the learned judge. They are being held by the Department of Corrections awaiting sentencing.
Alongside the criminal proceedings, the SFC has brought proceedings under section 213 of the SFO against various local and overseas companies and individuals, including Sit, Lam and Tam. In this context, the SFC obtained an interim injunction to freeze its assets.