Published On: Sun, Apr 28th, 2013

HK Investor Convicted of Manipulating Callable Bull Bear Contract

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Ashley Alder, HK SFC CEO

Ashley Alder, HK SFC CEO

The Eastern Magistracy today convicted Mr Lee Lam Chong of manipulating a Callable Bull Bear Contract (CBBC) during a pre-opening session. Lee pleaded guilty to the offence.

Magistrate Bina Chainrai sentenced Lee to one month imprisonment, suspended for 12 months and fined him $67,000. He was also ordered to pay the Securities and Futures Commission’s investigation costs.

The court heard that Lee placed contradictory buy and sell orders for a CBBC linked to Hang Seng Index during the pre-opening session on 20 April 2010, enabling the final equilibrium price to be fixed at a higher price at the end of the session,

Lee placed an at-auction bid order for one million contracts two seconds before the end of the pre-order matching period, pushing up the indicative equilibrium price by over 25% against the previous day’s final equilibrium price.
He made a notional profit of $66,970 from selling two million contracts which he had placed earlier. The fine will strip Lee of this profit.

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