HK watchdog orders freeze of 54 trading accounts linked to social media ramp-and-dump scam
The Securities and Futures Commission (SFC) has issued restriction notices to 13 brokers over a suspected social media ramp-and-dump scam.
Such a scheme is a form of stock market manipulation where fraudsters use different means to “ramp” up the share price of a listed company and then induce investors via social media platforms to purchase the shares they “dump” at an artificially high price.
The regulatory orders target the following 13 brokerages: Celestial Securities Limited, Central China International Securities Co., Limited, China Industrial Securities International Brokerage Limited, China Tonghai Securities Limited, Core Pacific – Yamaichi International (H.K.) Limited, KGI Asia Limited, Kingkey Securities Group Limited, Luk Fook Securities (HK) Limited, Monmonkey Group Securities Limited, Shanxi Securities International Limited, Zeus Securities Limited, Zhongtai International Securities Limited and Zinvest Global Limited.
The notices prohibit the brokers from dealing with or processing certain assets held in 54 trading accounts, which are related to a suspected social media ramp-and-dump scam involving the manipulation of the market in the shares of a company listed on The Stock Exchange of Hong Kong Limited between September 2020 and November 2020.
The restriction notices prohibit the companies, without the SFC’s prior written consent, from disposing of or dealing with, or assisting, counselling or procuring another person to dispose of or deal with, any assets in any way in the trading accounts up to certain amounts, including:
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entering into transactions in respect of any securities;
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processing any withdrawals or transfers of securities and/or cash on the instructions of any authorized person of the trading accounts or by any person acting on their behalf;
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disposing of or dealing with any securities and/or cash on the instructions of any authorized person of the trading accounts or by any person acting on their behalf; and
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assisting another person to dispose of or deal with any relevant property in a specified manner. They are also required to notify the SFC if they receive any of these instructions.
Let’s recall that, earlier in February, the SFC prohibited Enlighten Securities Limited and Futu Securities International (Hong Kong) Limited from dealing with or processing certain assets held in three trading accounts, which are related to a suspected social media ramp-and-dump scam.