Compliance & Regulation

SFC issues Restriction Notices to Two Brokers to Freeze Client Accounts linked to a Suspected Social Media Ramp-and-Dump Scam

The Securities and Futures Commission (SFC) has issued restriction notices to Emperor Securities Limited and Get Nice Securities Limited, prohibiting them from dealing with or processing certain assets held in 17 trading accounts which are related to a suspected social media ramp-and-dump scam involving manipulation of the market in late October 2021 in the shares of a company listed on the Stock Exchange of Hong Kong Limited.

The SFC conducted a search operation after issuing the restriction notices, SFC said in a press release.

The restriction notices prohibit the two brokerage firms, without the SFC’s prior written consent, from disposing of or dealing with, or assisting, counselling or procuring another person to dispose of or deal with, any assets in any way in the trading accounts including: (i) entering into transactions in respect of any securities; (ii) processing any withdrawals or transfers of securities and/or cash on the instructions of any authorized person of the accounts or by any person acting on their behalf; (iii) disposing of or dealing with any securities and/or cash on the instructions of any authorized person of the accounts or by any person acting on their behalf; and/or (iv) assisting another person to dispose of any relevant property or deal with any relevant property in a specified manner. The brokers are also required to notify the SFC if they receive any of these instructions.

The SFC considers that the issue of the restriction notices is desirable in the interest of the investing public or in the public interest.

The SFC’s investigation is continuing.