Ramp-and-dump investment scammer wanted by HK authorities after jumping bail and fleeing city

03-Apr-2021 Intellasia | South China Morning Post | 5:02 AM Print This Post

A 45-year-old mainland Chinese woman is wanted by Hong Kong authorities over her alleged role in an online investment scam after she jumped bail and fled the city last year.

The Eastern Court on Thursday issued an arrest warrant for Zeng Lingxi after she failed to appear in court to answer two charges of obstructing the Securities and Futures Commission’s (SFC) search operation in May 2020. She has also been put on the SFC’s wanted list.

The SFC operation related to an investigation of a suspected “ramp-and-dump” scam on social media involving manipulation of the shares of a Hong Kong-listed company.

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Zeng, an alleged member of a syndicate suspected of operating such scams on social media, was summoned for obstructing SFC employees executing a search warrant and exercising their powers under the Securities and Futures Ordinance during a search at her office.

The court was told that Zeng had not returned to Hong Kong since her departure on November 15 last year. In issuing the warrant, the court also ordered the forfeiture of Zeng’s cash bail of HK$100,000 (US$13,000).

A ramp-and-dump scam is a form of stock market manipulation where fraudsters use various means to “ramp” up the share price of a listed company and then induce investors via social media platforms to purchase the shares they “dump” at an artificially high price.

The Post previously reported instances of Hong Kong retail investors losing their savings from the scam during the coronavirus pandemic, as more people gripped by financial insecurity have taken to stock market speculation to try and make quick money.

In these online investment scams, fraudsters with considerable holdings of specific stocks befriend victims and persuade them to invest. Victims snap up the stocks, driving up their rates. But as soon as the prices peak, the fraudsters dump their holdings and make a killing, while the hapless victims are left watching as the prices collapse.

In 2020, police handled 544 reports of online investment fraud worth HK$266.3 million, tripling the 167 cases and more than five times the HK$48.6 million figure from the previous year. There were 338 cases in 2018 involving HK$278.1 million.

Last month, more than HK$900 million of suspected criminal proceeds were frozen in an unprecedented joint crackdown on such scams by police and the SFC.

Some 12 Hongkongers — seven men and five women aged 23 to 65 — were arrested on suspicion of fraud tied to money laundering and manipulating stock trading during raids on 27 locations, while 63 securities trading accounts were frozen.

Under the Securities and Futures Ordinance, those guilty of engaging in manipulative stock market activities or transactions face maximum penalties of 10 years in prison, and a fine of up to HK$10 million.

The punishments for money laundering include a HK$5 million fine and 14 years in prison.



Category: Hong Kong

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