HONG KONG — Hong Kong police have arrested 15 people on suspicion of manipulating the stock price of media tycoon Jimmy Lai’s company Next Digital and making millions in profit.
The arrests Thursday come after Next Digital’s stock price surged over 1,000% within a span of days last month following the arrest of Lai, an outspoken pro-democracy figure, and a raid on Next Digital headquarters. The arrest and raid were made under the city’s new national security law, which outlaws secession, subversion, terrorism and collusion with foreign forces.
Calls to support Next Digital by buying its stock appeared on a popular Hong Kong forum, and Next Digital’s stock price started surging. The 15 suspects were arrested for conspiracy to defraud and money laundering, police Chief Superintendent Chung Wing Man said.
Chung said they traded over 14,000 times, involving 1.69 billion shares, amounting to nearly 24% of the entire market activity over a span of three days. The suspects also offered to sell stocks, but before the selling order could be executed, they bought back the shares immediately, she said.
“We have reasonable grounds to believe that this is not ordinary market speculation activities, but rather an intention to push up the trade volume to distort the market situation and to attract innocent members of the public to invest in a particular stock,” she said at a news conference.
One of the suspects allegedly gained 25 million Hong Kong dollars ($3.2 million), while another made 700,000 Hong Kong dollars ($90,318), she said. After news of the arrests went public Thursday, Next Digital’s stock price surged again, at one point nearly doubling its opening price. It closed at 0.41 Hong Kong dollars, up 36.6%.