Hong Kong Regulators Take Actions Against Ramp-and-Dump Syndicate

Eight people—including a suspected ringleader of a sophisticated syndicate operating ramp-and-dump schemes through a complex cross-shareholding network of Hong Kong-listed companies involving illicit gains of $191 million – were arrested in a joint operation of the Securities and Futures Commission (SFC) and the Independent Commission Against Corruption (ICAC) mounted in the past two days (9 and 10 November).

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Other arrestees are also key members of the syndicate including the chairperson of a Hong Kong-listed company and three responsible officers of two brokers.

The SFC conducted the search in relation to suspected ramp-and-dump schemes involving the stocks of six Hong Kong-listed companies and other market misconduct under the Securities and Futures Ordinance (SFO). The ICAC conducted the search and made the arrests for suspected corruption offences under the Prevention of Bribery Ordinance.

The SFC's Executive Director of Enforcement, Mr Christopher Wilson, said: "Combating social media ramp-and-dump schemes has been and remains one of the top enforcement priorities of the SFC. The latest enforcement action sends a clear message to the public that the SFC has zero tolerance of the active participation of shareholders and senior executives of listed companies, as well as SFC-licensed individuals, in these manipulative schemes because of the harm of their misconduct to the interests of minority shareholders and the reputation of Hong Kong's financial markets."

Deputy Commissioner and Head of Operations of the ICAC, Mr Ricky Yau Shu-chun, said:"Corruption-facilitated market misconduct is intrinsically sophisticated, which required the concerted efforts and expertise of both the ICAC and the SFC to tackle. The ICAC and the SFC will continue to collaborate and work in partnership to combat such illicit activities to sustain Hong Kong's status as a clean international financial centre."