The Eastern Magistrates’ Court today sentenced Mr Pak Wing Yiu, a retail investor, to 60 hours’ community services and a fine of $180,000, following his conviction on 28 November 2013 on 10 counts of false trading in the shares of Huabao International Holdings Limited (Huabao). The court also ordered Pak to pay the Securities and Futures Commission’s (SFC) investigation costs (Note 1).
Between 16 November 2010 and 10 January 2011, Pak placed simultaneous bid and ask orders during the pre-opening session manipulating the final indicative equilibrium price (IEP) on nine occasions with artificial limit bid orders at high prices and large auction bid orders just before the close of the Pre-order Matching Period. He sold Huabao shares on a net basis at prices that were artificially high. On another occasion, Pak pulled down the final IEP by artificially placing limit ask orders at a lower price and large auction ask orders just before the close of the Pre-order Matching Period. He bought Huabao shares on a net basis at an artificially low price.
Pak’s order placing activities made no economic sense other than as part of an illegal manipulative strategy.
Note:
- Please see the SFC’s press release dated 28 November 2013.