Staff embezzling $50mn to invest CSOP SK Hynix Daily (2x) Leveraged Product led to threefold loss

A male employee who previously embezzled HK$50 million from a securities firm's account for personal investments, eventually losing HK$150 million, was revealed to invest the money into CSOP SK Hynix Daily (2x) Leveraged Product (7709), according to mainland media. 

It was reported that the massive loss was due to the combined leverage of margin financing and a leveraged exchange-traded fund, and that the trader may have heavily invested in the ETF before its sharp decline in July. 

The CSOP SK Hynix Daily (2x) Leveraged Product (7709), which aims to deliver twice the daily performance of SK Hynix, posted a staggering return of over 2,000 percent from January to June 22.

The leveraged ETF surged to a record high of HK$193.65 per share at the end of June, but plummeted to HK$52.58 as of July 20, a drop of over 72 percent, due to a sharp correction in the semiconductor sector. 

It was reported that the position has not yet been closed, and final loss may still fluctuate with price movements.

The 26-year-old employee was arrested by the police on suspicion of "theft."

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