Hong Kong Court Convicts Retail Trader of Securities Fraud with Illegal Short-Selling & Generated $77,000 in Profit, Provided Settlement Instruction F
1st March 2024 | Hong Kong
A Hong Kong court has convicted a retail trader (Christine Yeung Tak Sum) of securities fraud with illegal short-selling and generated $77,000 (HKD 602,600) in profit, by providing settlement instruction form to broker Aristo Securities showing non-existent 15 million shares of Hong Kong-listed Aurum Pacific China Group in another brokerage which then allowed her to illegally short-sell Aurum shares & bought back the shares on the same day. Hong Kong Securities & Futures Commission (SFC): “The Eastern Magistrates’ Court today convicted Ms Christine Yeung Tak Sum, an unemployed retail trader, after she pleaded guilty to securities fraud involving illegal short selling in proceedings brought by the Securities and Futures Commission (SFC). The conviction of Yeung of a charge of employing a fraudulent scheme with intent to defraud in transaction involving securities under section 300 of the Securities and Futures Ordinance (SFO) in the context of illegal short selling is first-of-its-kind. This case stemmed from a ramp-and-dump investigation during which the SFC discovered that Yeung had engaged in a fraudulent scheme to commit the offence (Notes 1 & 2). Yeung was remanded in custody pending sentencing on 20 March 2024. The Court heard that, on 28 May 2020, Yeung submitted a settlement instruction form to her broker Aristo Securities Limited purporting to show that she had 15 million shares in Hong Kong-listed Aurum Pacific (China) Group Limited (Aurum) in another brokerage firm, when in fact she did not. The broker, being misled, allowed Yeung to sell the shares in Aurum before the purported transfer of shares was settled. Yeung did not hold any of Aurum shares at the time she submitted the settlement instruction form and when she sold the shares. After illegal short-selling Aurum shares, she proceeded to buy back the same quantity of shares at a lower price to cover her short-sold positions within the same day. As a result, she obtained an illicit profit of about $602,600.” More info below:
“ Hong Kong Court Convicts Retail Trader of Securities Fraud with Illegal Short-Selling & Generated $77,000 in Profit, Provided Settlement Instruction Form to Broker Aristo Securities Showing Non-Existent 15 Million Shares of Hong Kong-Listed Aurum Pacific China Group in Another Brokerage Which Then Allowed Her to Illegally Short-Sell Aurum Shares & Bought Back the Shares on the Same Day “
- Article continues below - Quick Links, Ads & Announcements Caproasia Access | Events | Summits | Register Events | The Financial Centre The 2024 Investment Day | 2024 Family Office Summits | Family Office Circle Sign Up Basic Member: $5 Monthly | $60 Yearly Newsletter Daily 2 pm (Promo): $20 Monthly | $180 Yearly (FP: $680) The 2024 Investment Day 6th March Hong Kong | 13th March Singapore Private Equity, Hedge Funds, Boutique Funds, Private Markets & more. Taking place on 6th March 2024 in Hong Kong, 13th March 2024 in Singapore. Visit | Register here The 2024 Family Office Summit10th April Hong Kong | 24th April Singapore Join 100+ single family offices & family office professionals in Hong Kong & Singapore Links: 2024 Family Office Summit | Register here
Hong Kong Court Convicts Retail Trader of Securities Fraud with Illegal Short-Selling & Generated $77,000 in Profit, Provided Settlement Instruction Form to Broker Aristo Securities Showing Non-Existent 15 Million Shares of Hong Kong-Listed Aurum Pacific China Group in Another Brokerage Which Then Allowed Her to Illegally Short-Sell Aurum Shares & Bought Back the Shares on the Same Day Hong Kong, Asia’s leading financial centre
27th February 2024 – The Eastern Magistrates’ Court today convicted Ms Christine Yeung Tak Sum, an unemployed retail trader, after she pleaded guilty to securities fraud involving illegal short selling in proceedings brought by the Securities and Futures Commission (SFC).
The conviction of Yeung of a charge of employing a fraudulent scheme with intent to defraud in transaction involving securities under section 300 of the Securities and Futures Ordinance (SFO) in the context of illegal short selling is first-of-its-kind. This case stemmed from a ramp-and-dump investigation during which the SFC discovered that Yeung had engaged in a fraudulent scheme to commit the offence (Notes 1 & 2). Yeung was remanded in custody pending sentencing on 20 March 2024.
The Court heard that, on 28 May 2020, Yeung submitted a settlement instruction form to her broker Aristo Securities Limited purporting to show that she had 15 million shares in Hong Kong-listed Aurum Pacific (China) Group Limited (Aurum) in another brokerage firm, when in fact she did not. The broker, being misled, allowed Yeung to sell the shares in Aurum before the purported transfer of shares was settled.
Yeung did not hold any of Aurum shares at the time she submitted the settlement instruction form and when she sold the shares. After illegal short-selling Aurum shares, she proceeded to buy back the same quantity of shares at a lower price to cover her short-sold positions within the same day. As a result, she obtained an illicit profit of about $602,600.
The SFC reminds intermediaries of their obligation to implement and maintain appropriate measures to comply with the short selling requirements and to be mindful of red flags indicating illegal short selling by its clients (Notes 3 & 4).
Notes:
-
- Newly onboarded clients or clients with poor settlement records who request to sell large amounts of shares without first depositing the shares to the broker; and
- Retail clients who indicate that he/she will settle the sell transaction by transferring stocks from another broker via settlement instructions, but cannot provide a credible reason for not executing the sell transaction directly through the other broker.
Once the aforesaid red flags are detected, brokers should take reasonable steps to ensure its clients are in possession of the stocks before executing clients’ trade orders.
Managing $20 million to $3 billion. Investing $3 million to $300 million. For Investment Managers, Hedge Funds, Boutique Funds, Private Equity, Venture Capital, Professional Investors, Family Offices, Private Bankers & Advisors, sign up today. Subscribe to Caproasia and receive the latest news, data, insights & reports, events & programs daily at 2 pm. Join Events & Find Services Join Investments, Private Wealth, Family Office events in Hong Kong, Singapore, Asia-wide. Find hard-to-find $3 million to $300 million financial & investment services at The Financial Centre | TFC. Find financial, investment, private wealth, family office, real estate, luxury investments, citizenship, law firms & more. List hard-to-find financial & private wealth services. Have a product launch? Promote a product or service? List your service at The Financial Centre | TFC. Join interviews & editorial and be featured on Caproasia.com or join Investments, Private Wealth, Family Office events. Contact us at [email protected] or [email protected] Caproasia.com | The leading source of data, research, information & resource for financial professionals, investment managers, professional investors, family offices & advisors to institutions, billionaires, UHNWs & HNWs. Covering capital markets, investments and private wealth in Asia. How do you invest $3 million to $300 million? How do you manage $20 million to $3 billion of assets? Quick Links Caproasia Access | Events | Summits | Register Events | The Financial Centre The 2024 Investment Day | 2024 Family Office Summits | Family Office Circle 2021 Data Release 2020 List of Private Banks in Hong Kong2020 List of Private Banks in Singapore 2020 Top 10 Largest Family Office2020 Top 10 Largest Multi-Family Offices2020 Report: Hong Kong Private Banks & Asset Mgmt - $4.49 Trillion2020 Report: Singapore Asset Mgmt - $3.48 Trillion AUM For Investors | Professionals | Executives Latest data, reports, insights, news, events & programs Everyday at 2 pm Direct to your inbox Save 2 to 8 hours per week. Organised for success Register Below For CEOs, Heads, Senior Management, Market Heads, Desk Heads, Financial Professionals, Investment Managers, Asset Managers, Fund Managers, Hedge Funds, Boutique Funds, Analysts, Advisors, Wealth Managers, Private Bankers, Family Offices, Investment Bankers, Private Equity, Institutional Investors, Professional Investors Get Ahead in 60 Seconds. Join 10,000 + Save 2 to 8 hours weekly. Organised for Success. Sign Up / Register You are:
InvestorProfessionalFamily OfficeExecutive
Select:
SubscriptionMembershipEvents
Interests / Events / Summits / Roundtables / Networking:
Professional InvestorPrivate WealthFamily OfficePrivate BankingWealth ManagementInvestmentsAlternativesPrivate MarketsCapital MarketsESG & SICEO & EntrepreneursTax, Legal & RisksHNW & UHNWs Insights
Your Name*
Company*
Job Title*
Email 1 (Work / Personal)*
Email 2 (Work / Personal)
Country
- Manage $20 million to $3 billion of assets
- Invest $3 million to $300 million
- Advise institutions, billionaires, UHNWs & HNWs
- Caproasia.com
- Caproasia Access
- Caproasia Events
- The Financial Centre | Find Services
- Membership
- Family Office Circle
- Professional Investor Circle
- Investor Relations Network
- Professional Investor
- Family Office
- HNW Partnership
- Family Office Circle
- Family Office Networking
- Family Office Roundtable
- The Family Office Summit
- March 2024 - Hong Kong
- March 2024 - Singapore
- June 2024 - Hong Kong
- June 2024 - Singapore
- Sept 2024 - Hong Kong
- Sept 2024 - Singapore
- Visit: The Investment Day | Register: Click here
- The Investment Summit
- The Private Wealth Summit
- The Family Office Summit
- The CEO & Entrepreneur Summit
- The Capital Markets Summit
- The ESG / Sustainable Investment Summit
Owl Media Group takes pride in providing social-first platforms which equally benefit and facilitate engagement between businesses and consumers and creating much-needed balance to make conducting business, easier, safer, faster and better. The vision behind every platform in the Owl Media suite is to make lives better and foster a healthy environment in which parties can conduct business efficiently. Facilitating free and fair business relationships is crucial for any thriving economy and Owl Media bridges the gap and open doors for transparent and successful transacting. No advertising funds influence the functionality of our media platforms because we value authenticity and never compromise on quality no matter how lucrative the offers from advertisers may seem.