The Securities and Futures Commission (SFC) has secured for the first time separate court orders in Hong Kong and the UK to freeze HK$4.3 million (US$552,948) in assets belonging to three alleged insider traders – including a former Hong Kong Exchanges and Clearing (HKEX) staffer – who have left the city.
The city’s Court of First Instance granted a worldwide interim injunction order against the trio – former HKEX listing division staffer Chan Ching-wa and his relatives Lam Cho-man and Chau Chi-kwong – who were alleged to have used non-public company information to trade shares of at least seven Hong Kong-listed companies for profit or to avoid losses between June 2020 and March 2025.
In parallel, the SFC obtained an interim injunction order from the High Court of Justice, Business and Property Courts of England and Wales to freeze the assets of Chan and Chau in the UK.
The commission’s actions are based on section 213 of the Securities and Futures Ordinance, which allows it to seek compensation for victims from those found liable for malpractice in the stock market.
The court orders to freeze assets underscore the SFC’s commitment to ensure compensation for investors. It also marks the latest example of international collaboration among regulators to crack down on market irregularities and safeguard investors’ interests.
“The UK order obtained by the SFC would ensure that there are assets left to meet any future relief granted by the court, as the three suspects have left Hong Kong and transferred their assets outside Hong Kong,” the SFC said in a statement.
“This legal action underscored the SFC’s determination to hold market wrongdoers accountable for their misconduct, even if they are not in Hong Kong.”
The SFC alleged that Chan, who served as an assistant vice-president in the listing division of HKEX during the period under investigation, breached insider dealing regulations, as he had access to confidential and price-sensitive information of listed companies before these were announced to the public.
Chan allegedly used the information to trade these companies’ shares via securities accounts held by Lam, who then passed the information to Chau to make trades. Chan’s wife is Chau’s younger sister, while Chau’s older sister is Lam’s wife, according to the SFC.
The Hong Kong and UK court orders would prohibit the three suspects from disposing of their assets in Hong Kong and overseas, including in England and Wales, up to the total value of HK$3.7 million for Chan and Lam and HK$604,545 for Chau, the SFC said.
On Wednesday, HKEX commented on the court orders the SFC obtained against one of its former employees related to alleged insider dealing.
“HKEX upholds the highest standards of integrity and professionalism across its operations, takes this matter seriously, and is fully committed to continuously elevating the robustness of its internal processes and systems,” the HKEX statement said.
“HKEX has provided the SFC with its full assistance and cooperation regarding its investigation.”
Although the ongoing SFC case involves 24 listed companies, the recent court actions relate to deals concerning seven companies.
These seven firms are Jinmao Hotel and Jinmao (China) Hotel Investments and Management, SOHO China, Beijing Capital Land, Lifestyle International Holdings, Get Nice Financial Group, Ping An Healthcare and Technology Company and ENN Energy Holdings, according to the SFC, which did not provide further details. -- SOUTH CHINA MORNING POST
