Ching Lee stock manipulators get up to 80 months in prison

Wallis Wang

Three market manipulators were sentenced yesterday to 52 to 80 months of imprisonment by the High Court for their roles in a pump-and-dump scheme involving the Hong Kong-listed stock of Ching Lee Holdings Limited.

The trio - Sit Yi-ki, 33, Lam Wing-ki, 36 and Tam Cheuk-hang, 62 - were earlier convicted of conspiracy to carry out false trading by a jury, after a Securities and Futures Commission investigation showed they conspired to conduct manipulative transactions for Ching Lee's shares using 156 securities accounts in 2016, creating a false appearance of active trading.

Ching Lee's stock price skyrocketed eight-fold after it went public in March 2016, but later plummeted by 90 percent in a single trading day in September, with the three pocketing illicit profits of over HK$124 million.

Sit and Tam were each sentenced to six years and eight months - the heaviest sentence for such an offense in Hong Kong. Lam, with lower participation in the crime, received four years and four months.

In sentencing, deputy judge Douglas Yau Tak-hong said a deterrent sentence was necessary as market manipulation is a serious offense, with the maximum penalty being 10 years of imprisonment and a HK$10 million fine.

He said market manipulation not only affects the safety of the stock market and benefits the offenders, but also causes huge losses to the public.

Yau also said the case involved a large amount of fake transactions, complicated conspiracy schemes and transnational offenses.

While the three defendants were not the masterminds, who had fled Hong Kong and are unlikely to be arrested, they had put significant effort into the crime, which has damaged Hong Kong's reputation and image as an international finance center.

Christopher Wilson, the executive director of the SFC's enforcement division, welcomed the court's decision, saying "the harsh sentence is a milestone in the commission's fight against market manipulation."

He said this was the first time one of their cases has been heard at the High Court before a jury, and that "the SFC is determined to combat all forms of market manipulation to protect investors and uphold the stability and integrity of Hong Kong's international finance hub."

wallis.wang@singtaonewscorp.com