CHING LEE market manipulation case, 3 defendants sentenced to 4 years 4 months to 6 years 8 months in prison
Three defendants in the CHING LEE market manipulation case have been sentenced to imprisonment ranging from 4 years 4 months to 6 years 8 months. This is the first criminal prosecution case under the Securities and Futures Ordinance heard in the original court. The SFC stated that it will continue to crack down on market manipulation activities to protect the credibility of investors and the Hong Kong securities market. This case involves false trading offenses, resulting in illegal profits exceeding HKD 124 million
After the low-priced stock CHING LEE Holdings went public in March 2016, its stock price skyrocketed multiple times in a short period of time, only to plummet by 90% in a single day about 5 and a half months later. One man and two women were convicted of conspiring to commit false trading. The presiding judge, Eddie Wu, sentenced the three individuals to imprisonment ranging from 4 years and 4 months to 6 years and 8 months at the High Court. This became the first criminal prosecution case of its kind under the Securities and Futures Ordinance to be heard in the original trial court.
Wei Hongfu, Executive Director of the Regulatory Enforcement Department of the Securities and Futures Commission, stated that they will continue to invoke Section 213 of the Securities and Futures Ordinance to require the restoration of assets involved in the relevant transactions. He believed that this judgment sends a strong and clear message to the market, reflecting the Commission's zero tolerance for any further sustained market misconduct and determination to combat any form of market manipulation to protect the credibility of investors and the Hong Kong securities market.
Wei Hongfu emphasized that they have been closely monitoring similar illegal activities in the market and will continue to enforce other cases of market manipulation in the future, with possible enforcement actions in the short term.
The three defendants are Xue Yiqi, Lin Yingqi, and Tan Zhuoheng. The charges allege that the three individuals conspired with Sun Wen, He Mingxuan, and other unidentified individuals from March 29, 2016, to September 7, 2016, to carry out a complex market manipulation scheme. They artificially increased the trading volume of CHING LEE Holdings in 156 accounts controlled by related parties, creating a false or misleading appearance of active trading in CHING LEE shares, and illicitly profited over 124 million yuan