The Hong Kong Court of First Instance today convicted three individuals, Ms Sit Yi Ki, Ms Lam Wing Ki and Mr Tam Cheuk Hang of conspiracy to carry out false trading in the shares of Ching Lee Holdings Limited following a 22-day market manipulation trial by jury.
The criminal prosecution was brought by the Department of Justice following extensive investigations by the SFC. This also marks the first time that an offence under the Securities and Futures Ordinance (SFO) has been tried at the Court of First Instance.
The nine-member jury at the Court of First Instance unanimously found Sit and Tam guilty of the charge of conspiracy to commit false trading. The jury also returned a guilty verdict against Lam by majority.
The prosecution stemmed from the SFC’s 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 unknown persons to carry out a complex scheme of market manipulation.
They conspired to maintain an artificial turnover of the shares in Ching Lee by conducting manipulative transactions among 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 shares. The manipulative trading activities took place over a period lasting for more than five months in 2016 and netted illicit profits of over $124 million.
The Court adjourned the case to 17 June 2024 for sentencing. The three defendants applied for bail but their applications were refused by the learned Judge. They are remanded in custody by the Correctional Services Department pending sentencing.
In parallel with the criminal proceedings, the SFC has commenced proceedings under section 213 of the SFO against various local and overseas corporations and individuals, including Sit, Lam and Tam. In this connection, the SFC has obtained an interim injunction order to freeze their assets.
