Court sets trial date for employing a fraudulent scheme in securities transactions in illegal short

The Eastern Magistrates’ Court has fixed the trial of Ms Christine Yeung Tak Sum for 27 February 2024 to 5 March 2024 after she pleaded not guilty to employing a fraudulent scheme with intent to defraud in securities transactions and illegal short selling (Notes 1 & 2).

This is the first prosecution brought by the Securities and Futures Commission (SFC) in a case where a defendant is accused of employing a fraudulent scheme in securities transactions involving illegal short selling.

The SFC alleges that, between 27 May 2020 and 28 May 2020, Yeung, together with other people unknown, employed a scheme to defraud or to deceive her broker Aristo Securities Limited by, inter alia, submitting a false settlement instructions form to it for her securities transactions.

Yeung was granted bail pending trial.

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Notes:

Under sections 170(1) and (4) of the Securities and Futures Ordinance (SFO), it is an offence to sell securities at or through a recognised stock market unless he has a presently exercisable and unconditional right to vest the securities in the purchaser of them, or unless he believes and has reasonable grounds to believe that he has such a right.

Under section 300 of the SFO, it is an offence to engage in any act, practice or course of business which is fraudulent or deceptive in a transaction involving securities.