SFC, HK Police operation results in charges against ramp-and-dump syndicate
Thirteen suspects were charged with various criminal offences following an earlier joint operation of the Securities and Futures Commission (SFC) and the Hong Kong Police against a sophisticated ramp-and-dump syndicate.
Five of them were charged with offences of conspiracy to defraud and conspiracy to employ a scheme with intent to defraud or deceive in transactions involving securities under common law, section 300 of the Securities and Futures Ordinance (SFO) and section 159A and 159C of the Crimes Ordinance. Among them, two face additional charges of money laundering together with eight other defendants.
Twelve suspects appeared at the Eastern Magistracy today. No plea was taken and the case was adjourned to 17 April 2023.
The charges stemmed from a joint investigation by the SFC and the Police on suspected “ramp-and-dump” stock investment schemes. The alleged syndicate members organised and executed “ramp-and-dump” schemes in the shares of two Hong Kong-listed companies (target stocks) by using different social media platforms and manipulated the trading of a large volume of those shares through the use of a substantial number of nominee accounts. In implementing the schemes, the syndicate members were alleged to have committed offences involving market manipulation and money laundering.
Between October 2018 and May 2019, Mr Tam Chung Wai (previously known as Tam Sze Chun), Mr Tam Sze Leung, Mr Kwok Wai Leung, Mr Hui Ka Chun and Mr Chan Kai Sun Joseph were alleged to have conspired with a number of individuals to use multiple nominee accounts to corner the shares of the target stocks and drive up the price of those shares. At a later stage, the syndicate was alleged to induce investors to purchase those shares through different social media platforms. The syndicate then disposed of their shares aggressively at a profit and the price of the target stocks collapsed once the demand was exhausted.
The Court granted bail to the 12 defendants on these conditions: (i) not to leave Hong Kong; (ii) surrender all travel documents; (iii) report to police station on regular basis; and (iv) cash bail ranging from $50,000 to $1 million.