ComplianceOne Newsletter – October 2025
The topics discussed in this monthly newsletter are as follows:
MARKET NEWS
Enforcement News - Intermediary
SFC Reprimands and Fines UBS AG $8 million for Professional Investor Misclassification
SFC Prohibits Ex-Employee of BOCOM Over Undisclosed Nominee Account
SFC Suspends Ex-employee of Shanxi Securities Over 945 Unauthorized Trade Orders
ENFORCEMENT NEWS - LISTCO
Market News
1. SFC Supports Market’s Initiatives on Regulatory Compliance for Digital Asset Funds and Tokenised Funds
The SFC showed its support to the market’s initiatives in a seminar organized by the Association of Fund Administrators of Hong Kong and the Greater Bay Area (“AFA”) in October for raising industry awareness of regulatory compliance standards in the fast-evolving digital asset sector.
During the seminar, the AFA discussed various risk management and control measures to support the management of digital asset funds and tokenized funds. It is worth noted in the discussion of the importance for collaborative efforts within the fund industry to strengthen digital asset-related technical and regulatory compliance capabilities while adopting innovative technologies in fund management.
SIGNIFICANCE:
Participation of the SFC in the seminar showed its commitment to the industry as its initiative under the Pillar Re (Relationship) of the “ASPIRe” Roadmap. Dr Eric Yip, the SFC’s Executive Director of Intermediaries, said in the seminar that “by supporting industry participants in their ongoing efforts to uphold regulatory compliance standards in managing digital asset funds and tokenized funds, we (the SFC) aim to cultivate a safe, reliable, sustainable and competitive digital asset fund ecosystem anchored in robust risk management and investor protection measures.”
2. Navigating Fast-evolving Capital Markets through Balanced Regulation – the Golden Mean
Chairman of the SFC, Dr Kelvin WONG, delivered a speech on 21 October 2025 on the perspective of the SFC in maintaining a balanced regulatory approach, cherished with a mission to ensure that the capital market of Hong Kong would “continue to thrive in a well-regulated environment that upholds integrity.” And he also expressly emphasized that the SFC plays dual roles as both a guardian and a facilitator, and put forward with the following three reflections.
Some key takeaways are as follows:
(1) Evolving challenges to capital markets: regulator’s perspective
There are challenges to market integrity and market stability
(1.1) Challenges to market integrity
though remains as the world’s top three financial center, with its Fintech ranking jumping to global No.1, Hong Kong is still facing challenges stemming from gatekeeping listed issuers’ quality and forms of misconduct;
encountered with increasing demand from international investors for accountability, transparency and strong board leadership given Hong Kong as the world’s top IPO listing center; enhancing listing market quality, particularly the standards of corporate governance, is not without challenges;
over the years, there were cases of misconduct, false disclosure or accounting fraud that were jeopardizing the interests of the investors, and damaging public trust;
besides, evolving financial fraud, scams and deception cases also pose significant risks.
(1.2) Challenges to market stability
external risk factors threaten to exacerbate market volatility and systemic vulnerabilities, including geo-economic fragmentation and shifts in monetary policies;
our market resilience has stood the test of time as an effective shield against unexpected external shocks when global trade tensions intensified, HK was able to withstand the extreme volatility with no system failure in normal operations;
digitalisation, algorithmic trading and heightened market connectedness pose profound risks to systemic stability by amplifying vulnerabilities and accelerating the transmission of shocks; monitoring mechanism and resilience framework to mitigate system risks remain as deep concerns.
(2) A balanced regulatory approach in fostering sustainable development
In meeting the above challenges, Dr WONG shared his view of “Golden Mean” to maintain a balance between competing extremes; and to align the dual roles of investor protection and market development.
(2.1) Safeguarding investors
by upholding high standards of corporate governance, companies can improve their performance with rigorous internal controls and board oversight;
the SFC remains steadfast in delivering high-impact enforcement actions that punish wrongdoings, deter criminality, and restore investor confidence;
educating and bringing alert to the public against suspected fraud and suspicious trading platforms or products, while dedicating additional resources to anti-scam publicity campaigns.
(2.2) Fostering growth opportunities
Hong Kong’s evolving listing regimes and enhancement to IPO price discovery, provided fresh momentum for its listing market growth and diversification from traditional sectors;
the second notable achievement is our regulatory regime for digital assets as SFC pioneered itself in adopting robust standards while preserving the long-term potential;
(3) Proactive stakeholder engagement as key to balanced regulation
engagement is essential to attaining that Golden Mean in the regulatory approach;
through open dialogues with the financial industry which enables the SFC to ensure its frameworks effectively address market needs;
deepened mutual understanding with industry stakeholders through numerous seminars as regular engagement efforts;
SIGNIFICANCE:
As Dr WONG has said in the speech, “For the SFC, our mission is to find that Golden Mean where law, integrity, and development co-exist and reinforce each other. We believe this balanced regulatory approach has underpinned public trust in our markets for decades, and will continue to do so in the future.”
3. SFC and Québec’s AMF Enhance Regulatory Cooperation on Supervision of Cross-border Investment Management Activity
The SFC and the Autorité des marchés financiers (“AMF”), the financial regulator of Québec, Canada, have concluded a Memorandum of Understanding (“MoU”) to enhance cooperation on the supervision of investment managers of collective investment schemes operating in either market; and the two parties signed the MoU in Madrid, Spain on 27 October 2025.
What the MoU has achieved?
it provides for a regulatory framework for consultation, cooperation and exchange of information for regulated entities engaging in cross-border investment management services with respect to supervision and oversight;
it marks a new chapter in regulatory collaboration between the SFC and the AMF in the realm of asset management;
it included Québec of Canada on its list of Acceptable Inspection Regimes which facilitates the AMF-licensed managers in providing investment management services in respect of SFC-authorized funds.
SIGNIFICANCE:
As Mr. Yves Ouellet, the AMF’s President and Chief Executive Officer has said, “this MoU reflects our shared commitment to fostering robust, transparent regulatory standards. By strengthening cooperation between Québec and Hong Kong, we are enabling asset managers to access new opportunities, better serve investors, and support innovation, integrity, and resilience in our capital markets.”
Enforcement News - Intermediary
4. SFC Reprimands and Fines UBS AG $8 million for Professional Investor Misclassification
On 20 October 2025, the SFC publicly reprimanded and fined UBS AG (“UBS”) HK$8 million under section 196 of the SFO for systemic deficiencies in its internal controls, leading to the misclassification of clients as Professional Investors (“PIs”) over a 12-year period from 2009 to July 2022.
Case Details
The breaches stemmed from UBS's automated verification process, which misinterpreted the minimum portfolio requirements under the Securities and Futures (Professional Investor) Rules (“PI Rules”) for joint accounts, resulting in non-professional investor (“Non-PI”) clients being incorrectly treated as PIs.
A UBS look-back review for July 2018 to July 2022 identified 560 misclassified joint accounts (including 135 non-associate and 425 parent-child accounts), with 23 accounts involved in 9,190 securities pooled lending (“SPL”) transactions and 94 accounts in 500 PI-restricted product transactions.
This misclassification enabled UBS to provide securities pooled lending services without valid standing authorities or required disclosures, and to sell PI-restricted products (such as Chapter 37 bonds, accumulators, decumulators, and loss-absorption products) to ineligible clients, violating:
Securities and Futures (Contract Notes, Statements of Account and Receipts) Rules; and
Code of Conduct for Persons Licensed by or Registered with the SFC.
Remediate Result
The SFC noted aggravating factors, including the prolonged duration and a prior 2021 fine of HK$9.8 million for similar issues, but considered UBS's self-reporting (prompted by internal review and HKMA referral), cooperation, remedial enhancements to controls, and implementation of Enhanced Complaint Handling Procedures for affected clients. In result, the SFC issues public reprimand and HK$8 million fine against UBS.
For more details of the case, please refer to STATEMENT OF DISCIPLINARY ACTION
SIGNIFICANCE:
This disciplinary action underscores the SFC's emphasis on robust internal controls for accurate client classification to protect non-professional investors from unsuitable products and services.
It highlights recurring compliance risks in automated systems for global firms like UBS, serving as a reminder for licensed entities to regularly review interpretations of regulatory requirements, especially post-amendments, to avoid prolonged breaches and escalating penalties. The case also demonstrates the value of self-reporting and remediation in mitigating sanctions, while reinforcing inter-regulator cooperation in upholding market integrity in Hong Kong's financial sector.
5. SFC Suspends MTF Securities and its Responsible Officer Over Suspicious Transaction Monitoring Failures
The SFC has imposed a four-month suspension on Mr. Joey Lo Wai Hon (羅偉漢) (“Mr. LO”), effective from 30 September 2025 to 29 January 2026. MR. LO, a former responsible officer (“RO”) and manager-in-charge at MTF Securities Limited (泰富證券有限公司) (“MTF”) (formerly Magusta Securities Limited), was found to have failed in overseeing credit risk management and suspicious transaction monitoring.
Failures in Credit Risk Management
MTF granted substantial trading limits to three new clients (Client A, B, and C) shortly after they opened cash trading accounts in January 2021. Each client deposited only HK$10,000, yet MTF approved limits of HK$4 million for Clients A and C, and HK$5 million for Client B—without client applications or adequate due diligence.
Notable Red Flags included:
Trading limit exceeded client’s declared annual income | No records of income proof, bank statements, trading history, or personal reputation checks. | |
Client A | ✓ | |
Client B | ✓ | ✓ |
Client C | ✓ | ✓ |
Mr. LO, as an RO and Credit Committee member, was responsible for assessing creditworthiness and setting limits. However, he approved these at the request of MTF's substantial shareholder without independent scrutiny, potentially risking a liquid capital deficit if the clients defaulted.
Suspicious Trading Patterns and Reporting Delays
These three clients used nearly all their limits to trade shares of a Hong Kong-listed company (“Company X”) between 22 and 27 January 2021, generating profits from HK$3.8 million to HK$5.3 million. The trades exhibited suspicious features indicative of potential market misconduct and money laundering:
Clients bought shares at low prices just before a surge, without any apparent positive news.
Clients sold at high prices in the first minute of the afternoon session before a 68% price collapse, followed by further declines.
The trades accounted for 46%, 52%, and 30% of Company X's daily turnover during the period.
Post-trade, clients withdrew nearly all proceeds and conducted no further activity, inconsistent with their financial profiles.
The above patterns aligned with AML Guideline indicators (e.g. unusual transaction sizes, rapid withdrawals etc.)
Mr. LO did not investigate or report promptly. MTF only filed a suspicious transaction report (“STR”) to the Joint Financial Intelligence Unit (“JFIU”) in late July 2021, after SFC intervention.
For the full details, refer to the SFC's press release dated 2 October 2025, and Statement of Disciplinary Action.
SIGNIFICANCE:
The SFC deemed Lo guilty of misconduct, questioning his fitness and properness. Regarding to such matter, Licensed Corporation (“LC”) should reference the below table for ensuring its compliance:
Due Diligence | LC must rigorously assess client financials before granting credit, avoiding undue influence from shareholders.
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Monitoring Systems | Implement effective, ongoing transaction reviews to detect anomalies like unusual price movements or disproportionate trades.
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Timely Reporting
| Suspicious activities must be documented, investigated, and reported without delay to authorities like the JFIU and SFC.
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In June 2025, the SFC also prohibited Ms. WONG Lai Suen, another former MTF RO and executive director, from re-entering the industry for six months. (See Enforcement News – WONG Lai Suen)
This enforcement action reinforces the SFC's commitment to upholding market standards amid evolving risks. Firms should review their policies against the Code of Conduct, Internal Control Guidelines, and AML Guideline to mitigate similar exposures.
6. SFC Prohibits Ex-Employee of BOCOM Over Undisclosed Nominee Account
On 27 October 2025, the SFC prohibited Mr. CHENG Lai Ho (鄭禮豪) (“CHENG”), a former licensed representative accredited to:
Bank of Communications Co., Ltd. (交通銀行股份有限公司); and
Bank of Communications (Hong Kong) Limited (交通銀行（香港）有限公司) (collectively, “BOCOM”);
from re-entering the securities industry for seven months, from 27 October 2025 to 26 May 2026, pursuant to section 196 of the SFO.
Case Details
The sanction arises from CHENG's repeated violations of BOCOM's Staff Dealing Policy and Employee Code between April 2017 and April 2022, which aligned with regulatory requirements under paragraph 12.2 of the Code of Conduct for Persons Licensed by or Registered with the SFC.
Key breaches included failing to disclose two pre-existing personal securities accounts at other institutions, opening and controlling an undisclosed nominee securities margin account in his mother's name (where he conducted over 260 unreported trades), and violating the minimum 13-trading-day holding period on at least 12 occasions after 15 July 2020.
Reasons for the Disciplinary Action
The SFC found CHENG's actions wilful and dishonest, as he deliberately used the nominee account to evade BOCOM's monitoring and internal controls, despite attending compliance trainings and signing false declarations. In determining the penalty, the SFC considered the five-year duration of the misconduct, the need for deterrence, CHENG's cooperation, and his clean prior record, noting no harm to clients or the market.
For more details, please refer to STATEMENT OF DISCIPLINARY ACTION.
SIGNIFICANCE:
This disciplinary action underscores the SFC's stringent enforcement of internal compliance policies to mitigate conflicts of interest and maintain the integrity of licensed representatives, serving as a strong deterrent against deliberate evasion of employer monitoring and regulatory standards in Hong Kong's securities sector. It highlights the importance of honest disclosures and adherence to fitness and propriety requirements, potentially influencing firms to strengthen oversight of employee trading activities.
7. SFC Suspends Ex-employee of Shanxi Securities Over 945 Unauthorized Trade Orders
On 28 October 2025, the SFC suspended Mr. TANG Wai Choi (鄧偉財) (“TANG”), a former licensed representative of Shanxi Securities International Limited (山證國際證券有限公司) (“SSIL”), for seven months from 28 October 2025 to 27 May 2026, pursuant to section 194 of the SFO.
Case Details
The disciplinary action stems from TANG's misconduct between 10 July 2019 and 10 December 2019 (Relevant Period):
During which he logged into a client's securities account using the client's password and placed 945 orders via the internet without valid written authorization from the client or SSIL's knowledge, thereby circumventing internal controls and creating a false appearance that the trades were placed directly by the client.
Additionally, TANG failed to maintain proper records of the client's order instructions, breaching paragraph 3.9 of the Code of Conduct for Persons Licensed by or Registered with the SFC (Code of Conduct), which requires time-stamped records and telephone recordings for agency orders.
This exposed the client to risks of unauthorized trading, deprived SSIL of audit trails, and violated General Principle 2 (Diligence) of the Code of Conduct. The SFC deemed TANG guilty of misconduct and not fit and proper to remain licensed, considering the duration and frequency of the breaches, the need for deterrence, and his otherwise clean record. The investigation originated from a probe into a suspected ramp-and-dump scheme involving securities transactions handled by TANG at SSIL.
For more details, please refer to STATEMENT OF DISCIPLINARY ACTION.
SIGNIFICANCE:
This enforcement action highlights the SFC's commitment to upholding professional standards among licensed representatives by addressing breaches that undermine client protections and internal controls, serving as a deterrent against unauthorized account access and inadequate record-keeping that could facilitate market misconduct in Hong Kong's securities industry. It reinforces the importance of compliance with the Code of Conduct to maintain market integrity and prevent risks such as trade disputes or unauthorized activities.
Enforcement News - LISTCO
8.SFC Seeks Court Order to Freeze Assets up to $394 Million for Investors Compensation in Suspected Manipulation of Grand Talents Shares
On 30 September 2025, the SFC filed an application with the Court of First Instance for an interim order to freeze assets up to $394,067,589. This amount represents the estimated losses suffered by investors affected by an alleged sophisticated ramp-and-dump scheme involving the shares of Grand Talents Group Holdings Limited (廣駿集團控股有限公司) (08516.HK) (“Grand Talents”), which was listed on the GEM board of the Stock Exchange of Hong Kong Limited in October 2018.
The application is part of broader legal proceedings under section 213 of the Securities and Futures Ordinance (“SFO”) against 16 defendants, including suspected masterminds, accused of manipulating Grand Talents shares between June 2021 and June 2022. The SFC aims to prevent the defendants from disposing of their assets in Hong Kong to secure funds for potential compensation to victims.
The following table provides a chronological summary of key events in the Grand Talents case (for reference only):
Date | Remarks | Source |
25 Apr 2023 | The SFC issued a notice under Sections 204 and 205 of the SFO imposing restrictions on four client accounts at Silverbricks Securities Company Limited, totaling HK$94,610,762.71, due to suspected manipulative trading in Grand Talents shares from 24 November 2021 to 14 June 2022, leading to a 93% share price plunge on 15 June 2022.
The notice aims to prevent asset dissipation amid investigations into possible false trading, price rigging, and stock market manipulation.
| |
5 Aug 2025 | The SFC issued a notice under Sections 204 and 205 of the SFO prohibiting Tiger Brokers (HK) Global Limited from dealing with assets in a specified account (no. 63820919) linked to suspected manipulative trading in Grand Talents shares from 24 November 2021 to 14 June 2022, which culminated in a 93% share price drop on 15 June 2022.
The restrictions are to preserve assets during ongoing investigations into potential violations including false trading and stock market manipulation.
| |
29 Sep 2025 | The SFC applied for an interim court order to freeze assets up to HK$394,067,589 from 16 defendants, including suspected masterminds, in an alleged social media ramp-and-dump scheme manipulating Grand Talents shares from June 2021 to June 2022.
The court granted an interim injunction against four defendants, with the matter adjourned for the remaining 12. This action aims to secure funds for investor compensation estimated at the frozen amount.
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Court Orders to the 16 defendants
To date, the Court has granted an interim injunction against 4 of the defendants, restraining them from dealing with assets up to $394 million, which remains in force until further order.
For the remaining 12 defendants, the Court has issued directions and adjourned the matter to a future date. The SFC has indicated it will refrain from further comments as proceedings are ongoing.
SIGNIFICANCE:
This enforcement action by the SFC underscores its commitment to combating market manipulation and protecting investors in Hong Kong's financial markets. By seeking asset freezes, the regulator aims to preserve resources for restitution, deterring similar schemes that erode market integrity and investor confidence. It highlights the SFC's proactive use of legal tools to address complex frauds, such as social media-driven ramp-and-dump operations, and reinforces the importance of transparency and accountability in securities trading, potentially setting precedents for future cases involving cross-border or digital manipulation tactics.
9. Court Penalises AMTD Global Markets Limited for Contempt of Court Due to Non-compliance with SFC Notices and Orders it to Produce Records and Pay Fine
On 13 October 2025, the Court of First Instance ordered AMTD Global Markets Limited (現稱:奧翱驁集團（香港）證券有限公司, 前稱: 尚乘環球市場有限公司) (“AMTD”, formerly known as orientiert XYZ Securities Limited and currently known as oOo Securities (HK) Group Limited) to produce records and pay a fine for contempt of court, following proceedings initiated by the SFC under section 185 of the SFO.
The Court ordered AMTD to comply with the outstanding requests by 19 January 2026 and imposed a fine for past non-compliance, with the amount to be determined later. It rejected AMTD's excuses, including changes in ownership, management, and loss of records, deeming them unreasonable.
Case Overview:
Period/Date | Remarks |
Prior to 2023
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30 Jan 2023
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23 Nov 2023
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13 Oct 2025
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19 Jan 2026
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To be determined
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Current Status of the Case
The Court ordered AMTD to comply with the outstanding requests by 19 January 2026 and imposed a fine for past non-compliance, with the amount to be determined later. It rejected AMTD's excuses, including changes in ownership, management, and loss of records, deeming them unreasonable.
SIGNIFICANCE:
The SFC's Executive Director of Enforcement, Mr. Christopher Wilson, stated: “The SFC does not tolerate non-compliance with the SFO. Non-compliance undermines the SFC’s ability to discharge its regulatory functions and erodes the integrity of Hong Kong’s capital markets. The SFC will take robust enforcement action against non-compliance.”
This ruling emphasizes the SFC's zero-tolerance approach to non-compliance with investigative notices, highlighting the importance of licensed entities maintaining proper records and cooperating fully to uphold market integrity. It serves as a precedent for robust enforcement against excuses like corporate changes, potentially deterring similar failures in IPO-related probes and reinforcing regulatory oversight in Hong Kong's capital markets, with cross-border cooperation exemplified by the UK FCA's involvement.
10. Court Order Sentenced Wong Ming Chun to 7 Years and 8 Months' Imprisonment for Money Laundering Related to Misappropriation of Listed Company Funds
On 22 October 2025, the SFC welcomed the High Court's conviction and sentencing of Mr. WONG Ming Chun (王名俊) (“WONG”), the former financial controller and company secretary of Hua Han Health Industry Holdings Limited (華瀚健康產業控股有限公司) (00587.HK) (“Hua Han”), for two counts of money laundering.
Case Details
The case originated from the SFC's investigation into suspected false or misleading disclosures in Hua Han's financial statements from 2013 to 2015, which uncovered the misappropriation of fundraising proceeds. These findings were referred to the Police for further action. Hua Han, listed on the Main Board of The Stock Exchange of Hong Kong Limited since 2002 and delisted in 2020, was involved in health industry operations, highlighting vulnerabilities in financial controls within sectors that may intersect with insurance and investment products.
Enforcement Act and Court Order
WONG pleaded guilty to the charges under section 25(1) of the Organized and Serious Crimes Ordinance (Cap. 455), stemming from the misappropriation of funds raised by Hua Han in 2015.
He was sentenced to seven years and eight months' imprisonment and disqualified from serving as a director of any Hong Kong company for 12 years without court leave, pursuant to section 168E of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32).
[Court Case: HCCC 402/24]
SIGNIFICANCE:
This conviction emphasizes the critical role of financial gatekeepers, such as controllers and secretaries, in upholding corporate integrity and investor trust. As noted by SFC's Executive Director of Enforcement, Mr. Christopher Wilson, failures in these positions not only breach fiduciary duties but also threaten market stability.
For the insurance sector, it serves as a reminder of the need for robust internal controls to prevent similar abuses, particularly in entities handling policyholder funds or linked investments, reinforcing collaborative enforcement efforts between regulators to maintain transparency and deter financial misconduct.
11. SFC and HKEX Collaborate in Enforcement Action Against Former Directors of Universal Star for Failure to Disclose Material Loans and Conflicts of Interest in Prospectus
On 23 October 2025, the SFC and the Stock Exchange of Hong Kong Limited (“HKEX”) announced a collaborative enforcement outcome resulting in disciplinary action against:
Mr. LU Qingxing (呂慶星) (“LU”), former non-executive director; and
LU’s son, Mr. LYU Zhufeng (呂竹風) (“LYU”), former executive director;
of Universal Star (Holdings) Limited (星宇（控股）有限公司) (02346.HK) (“Universal Star”).
Case Details
The action stems from:
SFC's investigation into the directors' failure to disclose 13 outstanding loans totaling approximately RMB49 million where a Universal Star subsidiary served as co-borrower or guarantor, in the company's May 2019 IPO prospectus. These loans, taken out by LU between April 2017 and April 2019, primarily benefited him personally (with at least RMB44 million paid directly to him and RMB2 million to LYU, who transferred it to the subsidiary). The undisclosed loans represented material financial liabilities, breaching disclosure obligations to the sponsor and other directors.
Additionally, post-IPO, the pair caused the subsidiary to pledge its property as security for the loans without the knowledge or approval of other directors, independent shareholders, or the compliance adviser—violating Listing Rules on major and connected transactions. This conduct also involved unmanaged conflicts of interest, as LU personally profited, constituting a breach of fiduciary duties that prejudiced investors. The SFC shared its investigation findings, including loan and pledge evidence, with HKEX, leading to the disciplinary sanctions.
Regarding the STATEMENT OF DISCIPLINARY ACTION: HKEX issued a "Prejudice to Investors’ Interests Statement" (PII Statement), indicating that the directors' continued board tenure would have harmed investors, along with a public censure. Both individuals, who resigned in 2021 and 2023 respectively, agreed to settle without contesting the breaches.
SIGNIFICANCE:
This collaborative enforcement action between SFC and HKEX underscores the regulators' commitment to accountability in corporate governance, particularly for directors of listed entities, to safeguard investor interests and market transparency. The case reinforces the value of inter-regulator cooperation in detecting and addressing misconduct that could erode trust in Hong Kong's capital markets.
12. SFC Obtains Court Order to Freeze up to $82.4 Million of Assets Belonging to Suspected Manipulators of Smartac Shares
On 27 October 2025, the Court of First Instance granted an interim injunction order sought by the SFC under section 213 of the SFO against 12 individuals suspected of manipulating shares of Smartac International Holdings Limited (環球智能控股有限公司) (00395.HK) (“Smartac”, formerly Smartac Group China Holdings Limited, delisted from the HKEX Main Board on 20 February 2023).
Case Details
The proceedings form part of broader SFC legal actions against the former chairman and non-executive director of Ding Yi Feng Holdings Group International Limited (renamed Carmen Century Investment Limited on 3 July 2025), along with 28 other suspects and one corporate entity, for their roles in the alleged manipulation. Separately, in September 2025, the SFC obtained a consent order to freeze assets of one additional suspect, while an application for another remains pending. The interim injunction remains in effect until the next court hearing on 27 March 2026.
Court Order
The Court of First Instance prohibits the suspects from removing, disposing of, dealing with, or diminishing the value of their assets in Hong Kong up to $82.4 million, ensuring sufficient assets are available for potential restoration orders if contraventions of the SFO are proven. This action relates to alleged market manipulation of Smartac shares between 31 October 2018 and 11 March 2019.
Enforcement News Consolidate Table:
Remarks | Source/Linkage |
SFC issues restriction notices to 14 brokers to freeze client accounts linked to suspected Smartac manipulation. | |
SFC commences MMT proceedings against Sui Guangyi, two entities, and 28 suspects for alleged Smartac manipulation. | |
SFC applies for asset freeze up to $82.4m against 14 suspects; obtains consent order for one suspect; hearing adjourned to 24 October 2025. | |
Scheduled next hearing for the interim injunction order. |
SIGNIFICANCE:
This court order highlights the SFC's proactive enforcement strategy to preserve assets in market manipulation cases, protecting investor interests and ensuring potential remedies for affected parties.
By targeting a group allegedly involved in coordinated misconduct over an extended period, it underscores the regulator's commitment to combating sophisticated financial crimes that undermine market integrity, while the ongoing proceedings may set precedents for handling multi-party manipulations in Hong Kong's capital markets.
[End of ComplianceOne Newsletter – October 2025]
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