Hong Kong’s securities regulator has suspended the licence of Ku Yuen-Leung, an account executive of Bocom International Securities, for 18 months for share price manipulation.
Between November 5 and 26, 2010, Ku created a false appearance in the market with respect to the shares of Agricultural Bank of China (ABC) by placing large bid orders for ABC shares to drive up the prices of five related call warrants, said the Securities and Futures Commission (SFC).
All the bid orders – which were cancelled immediately after Ku sold the warrants at inflated prices for profit – were apparently not driven by genuine demand but intended to influence the market-making decisions of their liquidity providers.
Ku made a gross profit of HK$15,500 ($1,999) from trading the warrants. The suspension period runs from August 23 (yesterday) to February 22, 2018.
The SFC took the view that Ku’s misconduct undermined the integrity of the market and that he was not a fit and proper person to remain licensed.
Ku, who had applied to the Securities and Futures Appeals Tribunal for a review of the sanction, was granted leave to withdraw his appeal on August 23, 2016.
Ku is licensed to carry on type 1 (dealing in securities) and type 2 (dealing in futures contracts) regulated activities. He ceased to be accredited to Bocom International Securities on July 28, 2016.
The five call warrants involved were: DB-AGBK@EC1105A, DB-AGBK@EC1104, CS-AGBK@EC1104C, CS-AGBK@EC1104D, and CS-AGBK@EC1103B.