The Hong Kong Securities and Futures Commission has filed charges in a securities fraud case involving illegal short selling. A hearing will be held on April 9th.

On March 20, the Eastern District Court approved the application by the Department of Justice to transfer a securities fraud case previously brought by the Hong Kong Securities and Futures Commission to the regional court for criminal legal proceedings. This is the first time a securities fraud case involving illegal short selling is prosecuted in the regional court under Section 300 of the Securities and Futures Ordinance. The first hearing in the regional court is scheduled for April 9, 2026. The two defendants in the case, Chan Haicheng (male) and Li Baocheng (male), are accused of using fraudulent schemes to illegally short sell shares of 28 Hong Kong-listed companies, in violation of Section 300 of the Securities and Futures Ordinance. During the hearing, the court extended the bail period for Chan and Li, with conditions including: (i) not leaving Hong Kong; (ii) surrendering all travel documents; (iii) reporting regularly to the police station; (iv) each paying a bail of 280,000 Hong Kong dollars; and (v) residing at the declared address and notifying the police of any changes to the address. According to a previous press release, the Hong Kong Securities and Futures Commission stated that from May 27, 2020 to December 29, 2020, Chan and Li falsely claimed that Chan held a sufficient number of shares in the 28 companies to support the sell orders placed through Chan's securities account at Beigelong Securities Limited, when in fact this was not true. As a result, they were able to engage in illegal short selling of the shares of the relevant companies and profit approximately 11 million Hong Kong dollars.