The Eastern Magistrates Court of Hong Kong found a broker, Chan Yuk Hing, and his client, Paul Frederic Chane Yin, guilty of market manipulation in shares of Multifield International Holdings Limited in 2009.
Date: July 6, 2012
Tags: Hong Kong, SFC, Enforcement
The Eastern Magistrates Court of Hong Kong found a broker, Chan Yuk Hing, and his client, Paul Frederic Chane Yin, guilty of market manipulation in shares of Multifield International Holdings Limited in 2009.
An investigation by the Securities and Futures Commission (SFC) found that through Chan, Chane purchased 50,000 Multifield shares at an average price of HK$0.2261 in the morning trading session on 23 November 2009. Shortly after the afternoon session started, Chan asked Chane to buy Multifield shares at the best ask price, which was then HK$1.00 per share, four times the prevailing market price of HK$0.25 and suggested Chane to buy a single board lot of 2,000 shares. Chane agreed. As a result, the price of Multifield shares rose four-fold to HK$1.00.
Shortly before trading closed that day, Chane sold the 50,000 shares he had earlier bought at an average price of HK$0.2261 for an average selling price of HK$0.4258.
The Court agreed with the SFC’s allegation that there was no economically sensible reason for Chane to buy a single board lot at a price four times of the prevailing market price.
The Court also found that Chan and Chane, both intended to create a false or misleading appearance of the price for Multifield shares so Chane could later sell his shares at an artificially inflated price.
The Court adjourned the sentencing of Chan and Chane until 13 July 2012 pending their probation and community service order reports. They are liable to a fine of up to HK$1 million (US$128,958) and/or imprisonment for three years.
More details: http://www.sfc.hk/sfcPressRelease/EN/sfcOpenDocServlet?docno=12PR68
