Hong Kong Court Takes Strong Action against Suspected Boiler Rooms - Freezing $4.3 Million

The Hong Kong Securities and Futures Commission (SFC) has just announced today that it has obtained orders from the Court of First Instance to restrain a number of entities from carrying on unlicensed activities and is also suspending their websites.

It is very common recently to see regulators around the world issue warnings about scams related to Online Trading Online Trading Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Read this Term. The most common ones are “boiler rooms” where salespeople cold call targeted clients, and "clone websites" based on copying the brand or Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term of another firm. However, unlike American authorities who relentlessly hound fraudsters, most regulators never follow up with anything more than a warning.

The entities sanctioned by the Hong Kong watchdog in this case are: Broadspan Securities (www.broadspansecurities.com), Shepherds Hill Partners Hong Kong (www.shepherdshillhk.com) and Rich Futures HK Limited (www.richfutureshk.com). As of the time of this writing, Shepherds Hill's website is already down, Broadspan Securities' website is still up and the Rich Futures domain redirects to an unrelated winery website for some reason.

The SFC alleged before the court that these entities engaged in fraudulent boiler room activities and received money from investors. On December 19th, the watchdog obtained interim injunctions in the Court of First Instance to freeze approximately $4.3 million in bank accounts held by six entities. The SFC says it suspects that these bank accounts were used by Broadspan, Shepherds Hill and Rich Futures for receiving money from investors.

These entities were: Timeprime Ltd., Lynwin Ltd., Resmart Ltd., Fieldmark Corporation Ltd., DH Corporation Ltd. and SMD Partnership Ltd.

The court's interim orders will remain in force until the hearing of the SFC’s application for final orders against the parties, the date of which has yet to be fixed. The Hong Kong watchdog's investigation is continuing.