SFC issues restriction notices to three brokers to freeze client accounts linked to suspected market manipulation

30 Aug 2017



The Securities and Futures Commission (SFC) has issued restriction notices to Caitong International Securities Co., Ltd, Pacific Foundation Securities Limited and Yuanta Securities (Hong Kong) Company Limited (the brokers), prohibiting them from dealing with or processing certain assets held in client accounts which are related to suspected market manipulation in the shares of GME Group Holdings Limited on 22 February 2017 (Notes 1 to 3).

The SFC is not investigating the brokers, which have cooperated with the SFC’s ongoing investigation.  The notices do not affect their operations or their other clients.

The notices prohibit the brokers, 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 including: (i) entering into transactions for any securities; and/or (ii) processing any withdrawals or transferring of securities and/or cash arising from the disposal of securities; and/or (iii) disposing of or dealing with any securities or cash on the instructions of any authorized person of the client accounts or by any person acting on their behalf; and/or (iv) assisting another person to dispose of or deal with any relevant property in a specified manner.  The brokers are also required to notify the SFC if they receive any of these instructions.

The SFC considers that the issue of the notices is desirable in the interest of the investing public or in the public interest.

The SFC’s investigation is continuing.

End

Notes:

  1. The SFC issued the restriction notices pursuant to sections 204 and 205 of the Securities and Futures Ordinance (SFO).
  2. GME Group Holdings Limited was listed on the Growth Enterprise Market of The Stock Exchange Hong Kong Limited on 22 February 2017 by way of placing.  The SFC suspended trading of its shares under section 8(1) of the Securities and Futures (Stock Market Listing) Rules with effect from 1:00pm on the same day.  Trading in the shares resumed on 28 March 2017.
  3. Caitong International Securities Co., Ltd is a corporation licensed under the SFO to carry out Type 1 and 4 regulated activities, Pacific Foundation Securities Limited is a corporation licensed under the SFO to carry out Type 1 and 9 regulated activities and Yuanta Securities (Hong Kong) Company Limited is a corporation licensed under the SFO to carry out Type 1, 2, 4, 5, 6 and 9 regulated activities. 


Page last updated : 30 Aug 2017