The Securities and Futures Commission (SFC) is investigating suspected market manipulation in 20 stocks by several organised groups of traders last year.
Director of enforcement Mark Dickens yesterday said the investigations were the top priority of the enforcement division, of which he took charge this year.
He said the number of alleged manipulation cases being investigated was double the number last year - a rise he said could be due to heightened market activity last year.
'The SFC has sent out notices to brokers to collect trading information of the 20 stocks which are suspected to have been manipulated,' he said. 'It takes about 18 months to two years for the SFC to collect evidence about cases before any action can be taken.' Mr Dickens believes there are organised groups behind the active trading which has seen some stocks shoot up by as much as 200 per cent in a day. He said there was no target list of people under investigation in relation to manipulation because the investigation was based on actual stocks and not on individuals.
He said no case had been prepared for prosecution yet because the SFC needed to have evidence beyond doubt before a prosecution could be made.
Market manipulation is a criminal case.
Mr Dickens said that despite the difficulty in prosecuting such cases, manipulation should not be changed into a civil matter.