Police believe the 15 individuals manipulated the stock price of Next Digital after its owner Jimmy Lai was arrested last month.
Hong Kong police have reportedly detained 15 people for allegedly manipulating the stock price of media company Next Digital last month following the arrest of its owner, a vocal government critic, Jimmy Lai.
Police say the individuals are suspected of conspiracy to defraud and money laundering, after they allegedly conspired to make 13,200 transactions in Next Digital stock within three days following Lai’s arrest under the new national security law on 10 August.
Police believe the high transaction volumes were intentional, aimed at luring other investors into the market to drive up Next Digital’s stock price. The 15 individuals are said to have made a combined profit of about HKD 38 million (USD 4.9 million).
Next Digital had soared more than 1,000 percent over two days in August amid calls to buy the stock in a show of support for Lai after his arrest. The surge prompted an “extreme caution” warning from the SFC (Securities and Futures Commission).
It is unclear if the SFC was involved in the investigation that led up to the latest arrests. In typical market manipulation cases, the SFC would commence criminal proceedings in a magistrates’ court or, if a civil case, bring it to the Market Misconduct Tribunal.
Among those arrested were a civil servant, a suspected triad member, and six people who were unemployed.