Hong Kong’s largest market manipulation case comes to a close

Four people were found guilty of conspiring to manipulate the market in the shares of Asia Standard Hotel Group Ltd. This is the first indictable prosecution for market manipulation in Hong Kong under the Securities and Futures Ordinance.

An SFC investigation alleged that from 1 August to 5 September 2005, the four conspired to create a false or misleading impression with respect to the market for ASH Group shares in breach of section 295 of the SFO (Note 2). The SFC also alleged that:

The group’s trading activities were effectively rigged, producing a false picture of the depth and liquidity in the market for ASH Group shares;
The effect of the false trading raised the share price of ASH Group by 78%, ramping up the company’s market capitalisation by $4 billion;
The group’s trading constituted more than 50% of ASH Group shares traded during the period on turnover of approximately $190 million.

About The Author

Felix Shipkevich

Felix Shipkevich is a Manhattan-based attorney and general counsel for Shipkevich Law Firm. He has extensive experience working with the CFTC and NFA on registration, compliance, and enforcement issues for CPOs, CTAs, FCMs, IBs, and RFEDs. Felix also practices intellectual property and corporate governance law.