Hong Kong police detain 15 over multimillion-dollar manipulation of Next Digital stock after Jimmy Lai arrest, cite heavy losses for investors
- Suspects accused of posting messages on social media to boost trading volume and attract other buyers
- As the price swung between 7.5 HK cents to nearly HK$2, alleged fraudsters raked in nearly HK$38.7 million in profit over three days
Officers from the Narcotics Bureau’s financial investigations division made the arrests on Thursday, with one suspect, a 27-year-old jobless man, allegedly making HK$25 million (US$3.2 million) and another four each earning more than HK$1 million from the manipulation over three days.
Police noted the share price varied widely over the period, from a low of 7.5 HK cents on August 10 to a high of HK$1.96 (25 US cents) the next day, before closing at 65 cents on August 12.
Officers carrying out the raids seized computers, phones and bank documents, as well as froze accounts holding up to HK$30 million. But one lawyer specialising in financial regulation said the city’s stock market watchdog, the Securities and Futures Commission (SFC), should be in charge of investigating the case. Neither police nor the SFC said whether the commission was involved.
The 14 men and one woman, aged 22 to 53, made 13,200 transactions involving 1.69 billion shares, accounting for 23.8 per cent of the stock’s total turnover between August 10-12, according to bureau head Chung Wing-man. The shares in question were worth HK$1.5 billion.