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The Kowloon City Magistrates’ Court today sentenced Mr Wong Chun to a statutory maximum of 240 hours of community service and imposed a cold shoulder order against him for two years for false trading in the shares of Sino-Tech International Holdings Limited (Sino-Tech) (Notes 1 & 2).
Wong was remanded in custody pending today’s sentencing after he was found guilty earlier of false trading on 27 May 2015. The court also ordered Wong to pay the Securities and Futures Commission’s (SFC) investigation costs (Note 3).
Between December 2010 and January 2011, Wong created a false or misleading appearance of active trading in shares of Sino-Tech, using matched trades and some wash trades between his own account and the accounts of two other investors he was able to control to grossly inflate trading volume by more than 400%. As a result, the securities accounts controlled by Wong were able to off-load more than 200 million shares, making a gross profit of more than $2 million that he would otherwise not be able to do so (Note 4).
Notes:
- Under section 303(2)(b) of the Securities and Futures Ordinance (SFO), where a person is convicted of an offence under the SFO, the court may, in addition to any penalty, make an order that the person shall not, without the leave of the court, in Hong Kong, directly or indirectly, in any way acquire, dispose of or otherwise deal in any securities, futures contract or leveraged foreign exchange contract, or an interest in any securities, futures contract, leveraged foreign exchange contract or collective investment scheme for the period (not exceeding five years) specified in the order. Persons who are subject to cold shoulder order will be registered on the SFC website under the Current cold shoulder orders.
- Wong was a licensed representative of Ping An of China Securities (Hong Kong) Company Limited at the relevant time. Wong is currently not licensed by the SFC.
- Please see the SFC’s press release dated 27 May 2015.
- Matched trades are trades between parties who are acting together. A wash trade is a transaction that does not involve the change of beneficial ownership of the shares, i.e. a person buys from himself.
