HONG KONG: Retail Investors Convicted of Illegal Hong Kong Short Selling

Friday June 1 2012

The Eastern Magistrates Court has convicted three retail investors after they pleaded guilty to four counts of illegal Hong Kong short selling in the shares of Bao Yuan Holdings Limited (Bao Yuan).

The Court fined Mr Fung Hon Yue, Mr Yiu Wang Kwong and Ms Caren Lee Siu Fun a total of $18,000 and ordered them to pay the Securities and Futures Commission’s (SFC) investigation costs.

The charges related to trading in the shares of Bao Yuan on 17 December 2010, when the SFC alleged that the defendants did not and could not have had reasonable grounds to believe that they had a presently exercisable and unconditional right to sell the shares, thus constituting illegal Hong Kong short selling.

The three investors were charged together with another investor who today pleaded not guilty to the same charge. The Court adjourned the case against him to 28 June 2012.

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