Retail investors convicted and fined for illegal short selling

The Eastern Magistrates’ Court today convicted Ms Chan Siu Tai and her sister Ms Janice Chan after they pleaded guilty to illegal short selling in prosecutions brought by the Securities and Futures Commission (SFC).

The sisters were fined a sum of $114,000 and ordered to pay the SFC’s investigation costs.

The Court heard that on 27 occasions between 19 June 2019 and 5 September 2019, they placed orders to sell shares of seven listed securities on the Stock Exchange of Hong Kong Limited when they did not have any of those shares. They later bought back the shares to cover their short sold positions (Note 1).

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Note:

1. Section 170(1) of the Securities and Futures Ordinance prohibits the sale of securities when the person does not have, or does not believe or does not have reasonable grounds to believe that he has a presently exercisable and unconditional right to vest the securities in the purchaser of them.