HK's SFC freezes $125 million assets linked to suspected IPO fraud

Hong Kong securities regulator has frozen up to HK$125.2 million in assets a broker held on behalf of an entity suspected to be involved in an initial public offering fraud.

The Securities and Futures Commission has restricted Futu Securities International (Hong Kong) from dealing with or processing such assets over a fraudulent scheme to create a false or artificial appearance of demand for shares in an IPO.

Futu is not the subject of the SFC’s investigation, and the restriction notice does not affect Futu or its other clients, the SFC said.

The restriction notice prohibits Futu, without the SFC’s prior written consent, from disposing of or dealing with, assisting, counselling or procuring another person to dispose of or deal with, any assets in any way in the client accounts up to the amount stated in the notice. 

Futu is also required to notify the SFC immediately if it receives any instructions concerning the prohibited assets.

The SFC considers that the issue of the restriction notice is desirable in the interest of the investing public and in the public interest.

The SFC’s investigation is continuing.

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