Retail investor convicted of false trading

14 Sep 2020



The Eastern Magistrates’ Court has convicted Mr Ke Wen Hua of false trading in the shares of Carry Wealth Holdings Limited (Carry Wealth) following a prosecution by the Securities and Futures Commission (SFC) (Notes 1 to 3).

Ke pleaded guilty to the offence and was fined $30,000 and ordered to pay the SFC’s investigation cost.

The SFC’s investigation found that Ke began accumulating Carry Wealth shares in May 2011 and acquired most of his holdings in Carry Wealth shares at a price between $0.48 and $1.30 until September 2011.

On 4 September 2012, Ke conducted trading in Carry Wealth shares through six securities accounts under his control.  In doing so, the share price of Carry Wealth was pushed to reach as high as $0.6 which was 50% higher than the preceding day’s closing price of $0.4.  On the same day, Ke’s trading generated a trading volume of 58.6 million Carry Wealth shares, approximately 3,000 times the average daily trading volume of Carry Wealth shares during the previous 10 trading days.

Consequently, Ke was able to dispose of Carry Wealth shares at artificially inflated prices through his false trading and reduce the total of his trading losses by approximately $887,220.

End

Notes:

  1. Carry Wealth Holdings Limited was listed on the Main Board of The Stock Exchange of Hong Kong Limited in 2000.
  2. Please see the SFC’s press release dated 2 July 2020 for further details.
  3. The SFC commenced criminal proceedings against Ke over alleged false trading on 2 July 2020.  No plea was taken at the time and the hearing was adjourned to 27 August 2020 and further adjourned to 11 September 2020.


Page last updated : 14 Sep 2020