15 people arrested by Hong Kong police over Next Digital share manipulation

Hong Kong police said on Thursday that they had arrested 15 people for suspected conspiracy to defraud and money laundering.

They made more than HK$38 million (US$4.9 million) from the trading of Next Digital shares.

Chung Wing-man, chief superintendent of narcotics bureau of the Hong Kong police, said at a press briefing that after the founder of Next Digital Jimmy Lai and members of the company's senior management were arrested by the National Security Department of the Hong Kong Police Force on Aug. 10, the company's stock turnover and share price experienced unusual fluctuations.

The stock went up thousands of times in a single day on Aug. 11, compared to that of Aug. 7. Its share price rose and fell sharply, causing heavy losses on many investors, Chung said.

The 15 people involved 14 males and one female, aged between 22 and 53. They are suspected of conspiring to conduct intensive stock trading through social media. Sometimes they bought the same number of shares at the same or higher price before the selling command was even executed.

The police said the 15 people did this to create the illusion that stock trading was very active, and then they made use of the comments on social media to attract investors to enter the market and then sell stocks at high prices for a profit.

Chung said that the police will continue to investigate whether any suspicious sources of funds and behind-the-scenes manipulations were involved, and to find out the whereabouts of illegal profits.