Hong Kong Securities and Futures Commission: Involved in PASHUN INT'L (00574) false trading, court ruled that relatives and brothers guilty of false trading.

On May 15, the Securities and Futures Commission (SFC) of Hong Kong announced that in a previous prosecution, Lam Tai Fung (male) and his brother-in-law Ko Chun Yip (male) were accused of conspiring to engage in false trading of shares of PASHUN INT'L Holdings Limited (PASHUN) between April 9, 2017, and March 7, 2018. The Eastern District Court found them guilty after they admitted to the charges. The court postponed sentencing to June 10, 2025. Both were granted bail with the conditions of paying (i) a bail bond of HK$20,000 and (ii) a personal surety of HK$50,000. Information revealed that Lam admitted to eight counts of failing to notify the Stock Exchange of Hong Kong of changes in his interest in shares of PASHUN between June 2, 2017, and March 14, 2018, and the court also found him guilty. During the crucial period, Lam conspired with Ko to buy shares of PASHUN in order to maintain the closing price above a certain level. In his trading of PASHUN shares, there were eight instances where his shareholding level changed, triggering the obligation to disclose to the Stock Exchange and PASHUN. However, Lam has not made the required disclosures to date. Christopher Wilson, the Executive Director of Enforcement at the SFC, stated, "The market price of stocks should reflect the genuine supply and demand situation. Artificially setting closing prices hinders the market from establishing the true price and may create a false impression of attractiveness to investors. The SFC adopts a zero-tolerance attitude towards any improper conduct that undermines market confidence and integrity."