Two masterminds of the Hong Kong "sing high and deposit low" securities fraud case sentenced to a maximum of 24 months in prison.

On February 9th, the Securities and Futures Commission of Hong Kong issued a statement stating that the district court had recently ruled that two masterminds and their respective wives were convicted of securities fraud related to four Hong Kong listed companies. Today, the two masterminds were sentenced to imprisonment, while their wives were sentenced to community service orders. Following an investigation by the Securities and Futures Commission of Hong Kong, it was found that the two married couples had participated in a "pump and dump" scheme promoted on social media at a critical time when they were friends. The Hong Kong Department of Justice subsequently prosecuted them. The defendants engaged in short-selling activities without collateral for profit based on information provided by the "WeChat teacher". The Securities and Futures Commission of Hong Kong discovered evidence of fraudulent activities and referred the case to the police for joint action. Li Jingkang (male) and Lin Xianhui (male) were sentenced to 24 and 22 months in prison, respectively, while their wives, Chen Yishi (female) and Xu Peixin (female), were sentenced to 180 and 120 hours of community service, respectively. The case pointed out that between June and September 2020, Li and Lin, acting as masterminds, instructed their wives Chen and Xu nine times to deceive a client manager at Celestial Securities Limited (Celestial). Chen, Lin, and Xu intended to defraud by falsely claiming ownership of shares in four Hong Kong listed companies, inducing Celestial to issue sell orders for those shares. The three sold the shares at inflated prices without actually holding them, then bought back the shares at lower prices when the stock price fell, in order to cover their short positions and make illegal profits. The defendants were found to have engaged in short-selling activities without collateral, making a total profit of HKD 3.3 million, causing significant risk of loss to Celestial and undermining the integrity and stability of the securities market. Mr. Michael Duignan, Executive Director of Enforcement at the Securities and Futures Commission of Hong Kong, said, "The Securities and Futures Commission of Hong Kong welcomes the court's ruling. The successful conclusion of this case demonstrates the effectiveness of our close collaboration with the police in combating financial crimes, and helps to maintain the integrity and stability of Hong Kong's securities market."