Retail investor acquitted of market manipulation

13 Jan 2012

The Eastern Magistracy today found Chan Wing Fai not guilty of false trading in two stocks that took place in 2009.

Chan faced eight charges that he intended that or was reckless as to whether his trading had the effect of creating a false or misleading appearance with respect to the price for dealings in the securities of Sonavox International Holdings Limited (Sonavox) and PacMOS Technologies Holdings Limited (PacMOS), contrary to section 295 of the Securities and Futures Ordinance.

The Court heard that from 21 September 2009 to 2 December 2009, Chan bought single board lots of shares of Sonavox and PacMOS, which the Securities and Futures Commission (SFC) alleged did not reflect a genuine desire to buy the shares, causing the price of Sonavox and PacMOS to increase by as much as 80% and 28%, respectively.

The SFC alleged that Chan did not have a genuine intention to acquire Sonavox and PacMOS shares through his single-board-lot bid orders, except for the purpose of marking up the share price of Sonavox and PacMOS.

In deciding to acquit Chan, Deputy Magistrate Mr Winston Leung Wing Chung found that the prosecution failed to prove, beyond reasonable doubt, Chan’s manipulative intent for all the eight charges.

The SFC has asked for written reasons and will study them before deciding whether to lodge an appeal.

End

Page last updated : 1 Aug 2012