26 Nov 2009 HK jails four in $516 mln share price manipulation case

[Watchman]

Thomson Reuters
HK jails four in $516 mln share price manipulation case
11.26.09, 08:06 PM EST

HONG KONG, Nov 27 (Reuters) - A Hong Kong court has jailed four investors for conspiring to boost the share price of a listed company, underscoring the city's increasingly assertive financial sector oversight.

The case involved a conspiracy to manipulate shares of Asia Standard Hotel Group Ltd (ASH Group) in 2005, which helped boost the firm's share price by 78 percent and its market capitalisation by HK$4 billion ($516 million), said Hong Kong's financial sector watchdog.

The Securities and Futures Commission (SFC), which spearheaded the investigation, said the four had 'effectively rigged the market' and 'provided a false picture of the depth and liquidity' of ASH's shares by actively trading the stock through scores of brokerage accounts.

Following an earlier conviction, a district court in Hong Kong sentenced the alleged head of the conspiracy, Chan Chin Yuen, to 30 months in jail. Three others, including Chan's brother and sister-in-law, were given 26 months.

'This was a conspiracy to rip money out of the hands of innocent investors and is the largest market manipulation case brought before a court in Hong Kong,' said Mark Steward, the SFC's Executive Director of Enforcement.

Hong Kong's SFC has pursued an aggressive campaign amid the financial crisis to combat insider trading and other market abuses, which recently snared Morgan Stanley ( MS - news - people ) Managing Director Du Jun along with a score of others over the past year or so.

 

[hellfire]

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