Hong Kong authorities are investigating the suspension of two funds - which left investors facing millions of dollars in losses - amid allegations of possible fraud by now-defunct Hong Kong fund management company Asia Financial Asset Management. Aggrieved investors have also attacked Towry Law International, an international financial planning firm which marketed the funds to clients in Hong Kong, alleging promotional material was misleading and factually incorrect. However, Towry Law maintains it acted in good faith on the information available at the time - and is now carrying out an investigation with a view to suing on behalf of clients at the firm's expense. Investors said they stood to realise losses of 75 per cent or more when the funds were wound up. The Security and Futures Commission is investigating, according to sources, although SFC officials refused to comment or confirm the investigation. Liquidator Deloitte & Touche reported one of the funds, Global Diversified Trading (GDT), a hedge fund, appeared to have traded shares with other funds managed or advised by Asia Financial, possibly leading to artificially inflated values. However, a former director of Asia Financial, Eddie Lau, said the group was now defunct and denied there had been any price manipulation by the group to his knowledge. He had lost touch with the one-time head of Asia Financial Tony Wong Man-shek. 'Many people [have] tried to find him,' Mr Lau said. Mr Wong was banned from the securities markets for five years last April by the SFC in relation to another matter - breaching rules on takeovers. An investor, who did not wish to be named, said he was considering suing Towry Law over his losses - a promotional update issued less than two weeks before the SFC banned Mr Wong touted the 'fund manager['s]' record and advertised target returns of up to 25 per cent a year with 'moderate' volatility. The Global Opportunities Trading (GOT) fund would be run in a similar way to GDT, 'able to manage the risk of downturn by using a highly disciplined market approach, combined with the fund manager's astute sense of global financial markets', the promotion said. The investor said: 'You didn't expect it to go bust in six weeks.' The update appears to have incorrectly named Glanville European Management as investment manager and Mr Wong as fund manager. Bahrain-based firm AFAM was fund manager and the Hong Kong-based Asia Financial was investment adviser, according to information supplied by Towry Law to the South China Morning Post this week. It is not clear if Mr Wong was involved in AFAM at the time. However, Mr Lau said Mr Wong quit Asia Financial three months before the update was issued, and according to Towry Law now, he had quit the GDT fund five months earlier. Towry Law Asia managing director Robert Bull said the firm had acted on information supplied at the time, and was not aware that action had been launched by authorities against Mr Wong at the time the update was made available. The value of the GDT fund plunged to about US$8.6 million, less than a quarter of its US$36 million advertised before suspension last September, liquidators said. Losses in GOT, also suspended last September, are not yet clear but the investor said he had been told his stake, at one time worth US$15,000, had probably lost about 80 per cent of its value. The investor claimed he had been told a sell order on his shares had been executed only to find out a month later it had not. Mr Bull said the firm had continued to place sell orders with the funds until they were suspended, and had believed at the time they were being carried out on a weekly basis. The firm was still investigating the investor's complaint, but was doing everything it could to help individuals affected, including providing Frequently Asked Question sheets, he said. The firm had ascribed the GOT fund a 'high' risk rating, its second-highest risk level. Mr Bull said the firm had undertaken a 'comprehensive' due-diligence process on the funds, but that it was normal industry practice for 'alternative investment strategy funds' not to be required to fully disclose their assets like other funds. The financial planning firm refused to say how many Hong Kong people had invested in the two funds, for which it was the sole promoter, but according to the liquidator's initial report the GDT fund had a total of 69 investors including an unknown number from Bahrain.