Hong Kong police have arrested eight people for allegedly making unauthorised stock transactions, manipulating the market and using phishing scams to swindle about HK$46 million (US$5.8 million) out of more than 130 victims based locally and overseas.
Senior Superintendent Fanny Kung Hing-fun of the force鈥檚 commercial crime bureau said police had arrested seven men and one woman over two separate phishing cases, with one targeting locals and the other going after overseas investors.
Both cases allegedly involved scammers duping retail investors into sharing their securities accounts for unauthorised transactions, with some overseas victims referred to the force by the city鈥檚 Securities and Futures Commission.
鈥淭he methods used in these cases have revealed how the syndicates used phishing links to hijack accounts, orchestrating cross-border market manipulation and money laundering crimes,鈥 Kung said.
The senior superintendent said the syndicates started by sending phishing messages en masse that contained hyperlinks to websites set up to impersonate overseas securities firms.
The victims then input their account login details and one-time passwords issued by the real securities firms, allowing the scammers to access their investment accounts.
Senior Inspector Chow Tsz-hin of the same bureau said 137 victims had come forward as of Wednesday, with their combined losses exceeding HK$40 million.
The victims, aged 19 to 71, reported individual losses ranging from HK$1,000 to HK$2.9 million.
Chow said that scammers had exploited their access to the victims鈥 accounts to sell the latter鈥檚 investments for cash, before buying low-value and illiquid stocks and other derivative products, such as options.
鈥淪ince the liquidity of these unpopular stocks and options was relatively low, the force has discovered that most of these transactions were the only transactions in a day,鈥 he said.
鈥淭his makes it easy for scammers to use their own account and the victim鈥檚 account to conduct multiple transactions with a higher buying price and a low selling price for cash.鈥
Four of the male suspects were arrested on Wednesday and Thursday on suspicion of conspiracy to defraud in connection with the 137 local victims, police said.
Earlier this month, the commission also alerted the force to the activities of a scam syndicate that used local 鈥渕ule鈥 securities accounts to dupe an undisclosed number of overseas victims out of more than HK$6 million.
Mule accounts refer to accounts suspected of being sold, rented out or borrowed for laundering crime proceeds.
Superintendent Charles Fung Pui-kei said the syndicate behind the overseas cases had used similar methods to the other group to control a large number of foreign securities accounts to make a profit in the local financial market.
鈥淭his syndicate has used many local mule accounts to buy low-priced Hong Kong stocks before selling them at a high price. They had also controlled foreign accounts via phishing to buy these stocks at a high price for cash,鈥 he said.
Officers arrested three men and a woman in connection with the case on Wednesday and Thursday.