Court orders futures trader to compensate investors over $13 million

14 Jan 2014

The Court of First Instance today ordered Mr Tsoi Bun, a futures trader and former licensed intermediary, to pay $13,688,950 to around 500 investors affected by his manipulation of the calculated opening prices (COP) of index futures contracts in the futures market between 2007 and 2009 (Note 1).

Tsoi was convicted of five offences of price rigging on 30 January 2012 following a retrial, and admitted today to 49 further contraventions in proceedings brought by the Securities and Futures Commission (SFC) under section 213 of the Securities and Futures Ordinance.

The SFC alleged and Tsoi admitted that on 29 days between 14 February 2007 and 31 July 2009, he bought futures contracts at a lower final COP and sold futures contracts at a higher final COP than would otherwise have been determined as a result of artificial trades arranged by him.

Under today’s orders made by the Honourable Mr Justice G Lam, Tsoi must restore around 500 counterparties to the position they were in before transacting with him by paying them a total of $13,688,950 (the restoration amount). The counterparties are located both in Hong Kong and overseas.

The restoration amount is the difference between the COPs of the index futures contracts involved in the contraventions before Tsoi’s artificial orders are taken into account and the COPs created as a result of his artificial orders at which the affected investors transacted with him.

The court appointed Mr James Wardell and Mr Jackson Ip of Baker Tilly Hong Kong Restructuring and Recovery Limited to administer the restoration amount which Tsoi is required to pay into court on or before 28 January 2014.

The SFC's Executive Director of Enforcement, Mr Mark Steward, said: “It is only by understanding the actual consequences of misconduct that victims can properly be vindicated. The SFC will continue to ensure price riggers are caught and made to account wherever possible.”

The SFC prosecuted Tsoi for price rigging in 2009. He was acquitted by the Eastern Magistracy but a retrial in 2011 found him guilty of five offences. Tsoi was the first person to be prosecuted criminally by the SFC for market manipulation in Hong Kong futures market (Note 2).



  1. The COP is calculated during the Pre-Market Opening Period and serves as the market opening price for the corresponding product. A COP will be calculated only if the highest bid price of the limit orders entered into the Automated Trading System of the Exchange (HKATS) is greater than or equal to the lowest ask price of the limit orders. If more than one price satisfies this criterion, the COP will be calculated according to the established formula set forth in Rule 4.84 of Trading Procedures for Stock Index Futures and Stock Index Options Traded on HKATS. Before normal trading in the morning session begins, there is a 30-minute period between 9:15:00 and 9:44:59 allocated for the traders to place orders and for those orders to be matched in accordance with certain rules laid down by the Hong Kong Futures Exchange Limited. The 30-minute period is known as a Pre-Market Opening Period and it is divided into three sessions: (i) a Pre-Opening Session which runs from 09:15:00 to 09:40:59 (and from 14:00:00 to 14:25:59); (ii) a Pre-Open Allocation Session which runs from 09:41:00 to 09:42:59 (and from 14:26:00 to 14:27:59); and (iii) an Open Allocation Session which runs from 09:43:00 to 09:44:59 (and from 14:28:00 to 14:29:59).
  2. Please see the SFC’s press releases dated 1 September 2009, 20 January 2010, 1 February 2010, 5 October 2010, 13 June 2011 and 30 January 2012.

Page last updated : 14 Jan 2014