Hong Kong Court Jails Securities Fraud Masterminds Over Social Media "Stock Tips" Ramp-and-Dump Scheme

Two masterminds behind a securities fraud scheme involving social media "stock tips" were sentenced to prison terms of up to 24 months, after being convicted over market manipulation linked to four Hong Kong–listed companies.

The District Court ruled on 9 February 2026 that Mr Li King Hong and Mr Lam Hin Fai orchestrated a ramp-and-dump operation promoted through social media platforms, including messages circulated by so-called "WeChat teachers." Their wives, Ms Chan Ngai See and Ms Betty Hui Pui Yan, were also convicted and sentenced to community service for their roles in the scheme.

According to the judgment, the case stemmed from an investigation by the Securities and Futures Commission (SFC), which uncovered evidence that the defendants engaged in naked short selling while falsely claiming ownership of shares. The SFC subsequently referred the matter to the Police for a joint operation.

Between June and September 2020, Li—who was formerly an SFC-licensed representative—and Lam acted as the masterminds, directing their wives to deceive an account executive at CVP Securities Limited. On nine occasions, the defendants falsely represented that they held shares in four Hong Kong–listed companies, inducing the broker to place sell orders.

In reality, the shares did not exist. The defendants sold at artificially inflated prices and later repurchased the shares after prices fell, closing their short positions and generating illicit profits. The court found that the scheme yielded approximately HK$3.3 million while exposing the brokerage to substantial financial risk and undermining market integrity.

Li was sentenced to 24 months' imprisonment, while Lam received a 22-month term. Chan and Hui were ordered to complete 180 hours and 120 hours of community service respectively.

Commenting on the ruling, the SFC's Executive Director of Enforcement, Mr Michael Duignan, said the outcome demonstrated the effectiveness of close cooperation between the SFC and the Police in combating financial crime and safeguarding Hong Kong's securities market.