The Independent Commission Against Corruption (ICAC) and the Securities and Futures Commission (SFC) said their joint operation on March 10 and 11 targeted senior executives at two brokerages and a hedge fund.
“Officers of the SFC and the ICAC searched a total of 14 locations, including the offices of the licenced corporations, as well as residences of the arrestees. The ICAC also arrested six men and two women, aged between 35 and 60. The arrestees included, among others, senior executives of the two licenced securities firms and the licensed hedge fund management firm, as well as a middleman,” the two bodies said in a statement.
Authorities suspect executives from the brokerages accepted HK$4 million in bribes from the owner of the hedge fund in return for confidential information regarding share sales by various Hong Kong-listed companies.
“When the share placements were publicly announced, the share prices of the concerned stocks declined and the hedge fund allegedly made profits of around HK$315 million from its short positions,” the statement said.
Short positions refer to stock short selling, which is a high-risk trading strategy where an investor profits from a share price decline by borrowing shares, selling them, and buying them back later at a lower price to return to the lender.
While the ICAC and SFC did not name the three firms involved in the case, brokerage Guotai Junan International said earlier in a statement that one of its employees had been arrested following a raid on its office.
Edited by Thomas McAlinden
