SFC commence prosecution in securities fraud case involving illegal short selling

The Securities and Futures Commission (SFC) today commenced criminal proceedings at the Eastern Magistrates’ Courts against Mr Chan Hoi Shing and Mr Li Po Ching for employing a fraudulent scheme involving illegal short selling in the shares of 28 Hong Kong-listed companies, in contravention of section 300 of the Securities and Futures Ordinance.

The SFC alleges that, between 27 May 2020 and 29 December 2020, Chan and Li falsely represented that Chan held sufficient shares of the 28 companies to support sell orders placed through Chan’s securities account at Black Marble Securities Limited, when in fact he did not. Consequently, they were able to carry out illegal short selling in the shares of these companies and made a profit of around $11 million.

No plea was taken at today’s hearing and the Court adjourned the case to 6 February 2026 for the next hearing, at which the prosecution will apply to transfer the case to the District Court.

Chan and Li were granted bail pending the next hearing on the following conditions: (i) not to leave Hong Kong; (ii) surrender all travel documents; (iii) regular reporting to the police station; (iv) cash bail of $280,000 each; and (v) reside at the reported residential address and inform the Police of any change of residential address.

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