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.

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About the Author

Felix Shipkevich
Mr. Shipkevich’s practice focuses on regulatory, transactional, and enforcement matters in the fields of futures, commodities, and derivatives. He works with Futures Commission Merchants (FCMs), Retail Forex Exchange Dealers (RFEDs), Introducing Brokers (IBs), Commodity Pool Operators (CPOs), Commodity Trading Advisors (CTAs), Swap Dealers (SDs), Swap Execution Facilities (SEFs), and domestic and offshore hedge funds. Mr. Shipkevich guides clients on procedures related to registration with the U.S. Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA), as well as domestic and international regulators in local jurisdictions. Mr. Shipkevich prepares and helps implement compliance, anti-money laundering (AML), and Electronic Trading Systems (ETS) procedures for clients in the commodities and derivatives fields.

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