Hong Kong's Securities And Futures Commission: Broker Acquitted Of Illegal Short Selling

The Eastern Magistrates’ Court today found Mr Wong Hung not guilty of illegal short selling (Notes 1 & 2).

The Securities and Futures Commission (SFC) alleged that, on 20 occasions between 6 and 20 January 2012, Wong sold shares of five stocks through his securities account at Hung Sing Securities Limited, his employer at the material time, when the total of the shares he sold was more than the shares he held (Note 3).

In deciding to acquit Wong, Magistrate Mr Li Chi-ho found that as Wong placed a large number of orders each day and that he did not gain any profit from selling the five stocks, he could not exclude the possibility that Wong was just careless and that he did not realise he was not holding sufficient interests in the five stocks when placing the sell orders.

The SFC is considering the Magistrate’s decision.

Notes:

1. Wong was acquitted in 2014 at the Eastern Magistrates’ Court for the same offences but the case was remitted back for a re-trial as a result of a successful appeal by the SFC in the Court of First Instance.  Please see the SFC’s press releases dated 4 June 2014 and 27 December 2017.
2. Wong is currently licensed under the Securities and Futures Ordinance (SFO) to carry on Type 1 (dealing in securities) regulated activity and is accredited to KGI Asia Limited.
3. Section 170(1) of the SFO prohibits the sale of securities when the person does not have a presently exercisable and unconditional right to sell them.