Hong Kong Arrests 12, Seizes $116 Million After Stock Scam
Hong Kong police have arrested 12 people for running a stock manipulation scheme that duped investors on social media into buying shares at inflated prices before the stock was dumped, authorities said on Friday.
Raids across Hong Kong this week in a joint investigation by
police and the Securities and Futures Commission (SFC) led to the arrests,
although no formal charges have yet been made, and the freezing of assets of up
to HK$900 million.
“Our estimate is there is a large number of victims but many
of those victims might not want to come forward because they might feel
embarrassed about being duped in this way,” Ashley Alder, the chief executive
of SFC, told a news conference.
Police said the 12 arrested ran schemes on platforms such as
WeChat by posing as investment professionals offering stock tips and insider
information and targeted retail investors to buy small, mostly illiquid stocks.
The role of social media in the manipulation of stock
markets has drawn increased scrutiny worldwide following the GameStop saga in
the United States.
Shares of the firm soared since January after Reddit users
banded together to squeeze hedge funds that had bet against the video game
retailer and other companies.
The stocks that figured in the Hong Kong scam were listed on
the main and GEM boards of the city’s exchange, and generally drew little
investor interest soon after their IPOs, Alder said.
Police said the groups boosted the impression of
authenticity by posting pictures of well-known stock commentators and their
comments.
More cases are under investigation, the SFC said, adding
that similar scams had been the focus of 300 complaints since the middle of
last year.
Comments
Post a Comment