Bright Smart customer accounts suspected of being manipulated by hackers, buying China Goldstone shares which surged nearly 8 times before rapidly declining. Reports say Bright Smart has fully compensated customers for their losses
BRIGHT SMART Securities is suspected of being hacked, with customer accounts manipulated to conduct unauthorized trades, buying shares of China Goldstone, resulting in a nearly 8-fold surge in stock price. BRIGHT SMART has fully compensated customers for their losses and reported the incident to the police and the Hong Kong Securities and Futures Commission. On October 24th, China Goldstone's stock price fluctuated dramatically, with a significant increase in trading volume. The police have intervened in the investigation, and the case is being followed up by the Cyber Security and Technology Crime Bureau
According to the Zhitong Finance APP, the representative lawyer of BRIGHT SMART has sent letters to multiple brokerage firms, indicating that there were suspicions of a hacker invading customer accounts in late October, conducting unauthorized stock trades, and purchasing shares of China Goldstone (01380), suspected of fraudulently manipulating customer accounts to acquire stocks at high prices. It is reported that the stock price of China Goldstone fluctuated significantly on October 24, reaching a high of HKD 1.12, an increase of 7.6 times compared to the previous day, and a low of HKD 0.128. The trading volume on that day reached 397 million shares, which is 297 times more than the average trading volume of 1.33 million shares over the previous 20 trading days. According to media reports, BRIGHT SMART has reported the incident to the police, the Joint Financial Intelligence Unit, and the Hong Kong Securities and Futures Commission. The police confirmed that a report was received on that day, and it was revealed that BRIGHT SMART has fully compensated customers for their losses.
It is understood that several brokerage firms that received the lawyer's letter from BRIGHT SMART did not accept the request to freeze the accounts of customers who sold stocks. An employee from one brokerage firm stated that they would only freeze customer accounts upon receiving instructions from law enforcement agencies such as the Hong Kong Securities and Futures Commission or the police, and that the statement from the opposing lawyer alone does not constitute sufficient grounds.
The lawyer's letter did not mention the number of customer accounts or the amounts involved in the incident. According to the Central Clearing and Settlement System (CCASS) shareholding records, on October 24, BRIGHT SMART held 1.741 million shares of China Goldstone, and by "T+2" day, October 28, the shareholding increased to 35.925 million shares, indicating that BRIGHT SMART acquired over 34 million shares that day. Based on the average price of HKD 0.352 compared to the closing price of HKD 0.221 on that day, it is estimated that BRIGHT SMART may have incurred a loss of approximately HKD 4.5 million, which is relatively minor compared to the HKD 312 million earned by BRIGHT SMART in the first half of the fiscal year ending September this year.
In response to inquiries, the police stated that they received a related report on the 24th of last month, and the case has been handed over to the Cyber Security and Technology Crime Bureau for follow-up, with no arrests made so far. The Hong Kong Securities and Futures Commission does not comment on individual incidents but stated that all public complaints will be followed up and handled according to established mechanisms
