The Securities and Futures Commission said the Court of First Instance, part of Hong Kong’s High Court, allowed the appeal of former responsible officer of Guotai Junan, Pan Ming, and overturned his conviction for one offence of false trading under the Securities and Futures Ordinance.
One 1 March 2011, Ming was convicted of one count of market manipulation following an investigation by the SFC and was sentenced to five months imprisonment. He was also ordered to pay the SFC’s costs of HK$69,268 ($8,931, £5,660) within one month from the date of the court case.
Ming was charged with his client, an equity trader of a fund manager, who was charged with market manipulation and fraud offences but who has subsequently absconded from Hong Kong. A warrent for the trader’s arrest has been issued.
The SFC alleged that the client instructed Ming to fix a higher closing price for the shares of IRICO Group Electronics Co, a company listed on the Hong Kong stock exchange. The SFC further alleged that Ming agreed to carry out the instruction and directed his colleague to place five buy orders in the last two minutes of trading, two of them single board lots.
These orders were for a price higher than the prevailing market price. As a result, the IRICO share price closed 14% higher. The SFC alleged this was to facilitate a subsequent off-market transaction after market close, involving 15 million IRICO shares at a price higher than the closing price.
