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Court of Final Appeal unanimously dismisses appeal by suspected overseas manipulators

The Court of Final Appeal (CFA) has unanimously dismissed the appeal by Mr David Subotic, Mr Sasha Szabo, Eastmore Global, Ltd., Eastmore Management, LLC, Eastmore Holdings, Ltd and Current Trading, LLC (collectively, the Eastmore Defendants) concerning service out of the jurisdiction that arose from legal proceedings brought by the Securities and Futures Commission (SFC) in a case of alleged false trading.

In July 2019, the SFC commenced civil proceedings under section 213 of the Securities and Futures Ordinance (SFO) in the Court of First Instance (CFI) against a group of local and overseas traders and investors (Syndicate), including the Eastmore Defendants, who were suspected of manipulating the shares of Ching Lee Holdings Limited (Ching Lee) through a large scale and highly organised scheme (Scheme). The Scheme generated around $124.9 million of illicit profit for the Syndicate (Note 1).

The Eastmore Defendants are overseas nationals or entities incorporated outside Hong Kong. The SFC obtained, inter alia, ex parte Mareva injunctions against the Syndicate, and leave for service out of the jurisdiction on the Eastmore Defendants under certain gateways of the Rules of the High Court. The Eastmore Defendants made several applications to challenge the CFI’s leave for the SFC to serve them out of the jurisdiction (Notes 2 & 3).

On 23 July 2021, the grant of leave for service out of the jurisdiction on the Eastmore Defendants was upheld by the CFI. Their appeal against the CFI’s decision was dismissed by the Court of Appeal (CA) on 30 December 2022 (Note 4).

The Eastmore Defendants appealed against the CA’s decision to the CFA. In dismissing the appeal of Eastmore Defendants, the CFA held that leave to serve out of jurisdiction is not required in the present case (Note 5).

In arriving at the conclusion, the CFA remarked in its judgment that “the SFO’s policy of conferring jurisdiction over persons who engage in false trading “elsewhere” affecting the Hong Kong market is clear and unsurprising. Trading on the HKEX is global and making sanctions legally available against offshore fraudulent parties who cause losses to investors or other participants in the local market is obviously justified”.

The Court also said: “the SFO’s intent is plainly to cater for the territorial dimensions of wrongful acts damaging to market participants. Thus, section s274(1) and section 274(3) cater for false trading when a person “in Hong Kong or elsewhere” does the relevant wrongful acts having an impact on the local market.” The Court further made clear that section 274 (or other sections of Part XIII of the SFO) are not merely descriptive provisions and are designed to operate in combination with other SFO provisions and should be read and interpreted together (Notes 6 & 7).

The SFC’s Executive Director of Enforcement, Mr Christopher Wilson, said, “We welcome the CFA’s judgment which affirms our power under section 213 of the SFO. This judgment sends an important message that the SFC will continue to safeguard the collective interests of the investing public. The SFC will relentlessly pursue enforcement actions to tackle cross-border market misconduct by wrongdoers regardless of where they are.”

Separately, the SFC has commenced criminal proceedings against some of the local Syndicate members for conspiring to carry out false trading in the shares of Ching Lee. The case will be tried by jury in the CFI on 22 April 2024 (Note 8).



  1. Please see the SFC’s press release dated 27 August 2019.

  2. The Eastmore defendants are either national of Canada or United States, or incorporated in the Cayman Islands, Delaware, USA or the Republic of Seychelles.

  3. By a summons dated 11 November 2019, the Eastmore Defendants sought (i) a declaration that the court had no jurisdiction over them in respect of the subject matter of the claims or relief in the action, (ii) an order that the leave given by the judge be set aside, and (iii) an order that the interim injunction against them be discharged.

  4. The CFI and CA’s judgments dated 23 July 2021 and 30 December 2022 respectively are available on the Judiciary’s website.

  5. Order 11 rule 1(2)(b) of the Rules of the High Court provides that service out of jurisdiction is permissible without leave where a claim made by a writ is one which by virtue of any written law the CFI has power to hear and determine even though a defendant is not within the jurisdiction. As Order 11 rule 1(2)(b) applies, leave to serve out of jurisdiction is not required in the present case.

  6. According to section 274 of the SFO, false trading takes place when, in Hong Kong or elsewhere, a person does anything or cause anything to be done, with the intention that it has the effect of creating a false or misleading appearance of active trading in the securities or with respect to the market for or the price for dealing in the securities.

  7. The CFA’s judgment dated 30 October 2023 is also available on the Judiciary’s website.

  8. Please see the SFC’s press release dated 13 August 2020.



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