The Securities and Futures Commission has issued restriction notices to 10 brokers, prohibiting them from dealing with or processing certain assets held in 31 trading accounts, which are suspected to be related to a social media ramp-and-dump scam.
The scam that happened between November 2021 and June 2022 involved the trading of a listed company's shares, the market watchdog said in a statement yesterday.
The brokers are China Industrial Securities International Brokerage, Quam Securities, Futu Securities International (Hong Kong), Imperium International Securities, Lego Securities, Phillip Securities (Hong Kong), Silverbricks Securities Company, uSmart Securities, Valuable Capital, and Webull Securities.
The restriction notices prohibit the above-mentioned brokers, without the SFC's prior written consent, from disposing of or dealing with, or assisting, counseling, or procuring another person to dispose of or deal with, any assets in any way in the trading accounts up to a certain amount, it said. The brokers are also required to notify the SFC if they receive any of these instructions.
The SFC considers that the issue of the restriction notices is desirable in the interest of the investing public or in the public interest and the investigation is continuing, said the statement.
A social media ramp-and-dump scam is a form of stock market manipulation where fraudsters use different means to "ramp" up the share price of a listed company and then induce investors via social media platforms to purchase the shares that the fraudsters "dump" at an artificially high price.
