SFC and ICAC Joint Operation Targets Insider Dealing and Corruption

SFC HK Enforcement News

Filed March 12th, 2026

Detected March 18th, 2026

Summary

The SFC and ICAC conducted a joint operation targeting insider dealing and corruption involving senior executives of three licensed corporations. Eight individuals were arrested, and investigations revealed alleged bribes of over $4 million leading to approximately $315 million in illicit profits.

View original document View source feed page

What changed

The Securities and Futures Commission (SFC) and the Independent Commission Against Corruption (ICAC) of Hong Kong have conducted a joint operation, codenamed "Fuse," targeting alleged insider dealing and corruption. The operation involved the search of 14 locations and the arrest of eight individuals, including senior executives from two licensed securities firms and a licensed hedge fund management firm. It is suspected that senior executives accepted over $4 million in bribes to disclose confidential share placement information, which the hedge fund then used to make approximately $315 million in profits through short selling and equity swaps.

This enforcement action highlights significant risks for licensed corporations and their senior management. Regulated entities should review their internal controls and compliance procedures related to the handling of confidential information and potential bribery. The investigation is ongoing, and individuals involved face potential charges under the Prevention of Bribery Ordinance, the Organized and Serious Crimes Ordinance (money laundering), and the Securities and Futures Ordinance (insider dealing).

What to do next

Review internal controls for handling confidential information.
Reinforce employee training on anti-bribery and insider dealing policies.
Assess compliance with short selling and equity swap regulations.

Penalties

Individuals are suspected of breaching the Prevention of Bribery Ordinance, the Organized and Serious Crimes Ordinance (money laundering), and the Securities and Futures Ordinance (insider dealing). Specific penalties are not detailed as the investigation is ongoing.

Source document (simplified)

SFC and ICAC joint operation in alleged insider dealings and corruption involving senior executives of licensed corporations

12 Mar 2026

The Securities and Futures Commission (SFC) and the Independent Commission Against Corruption (ICAC) conducted a joint operation codenamed “Fuse” on 10 and 11 March 2026 targeting insider dealing and involving corruption. Senior executives of three licensed corporations, including two securities firms and a hedge fund management firm, were persons of interest in the case (Note 1).

During the joint operation, officers of the SFC and the ICAC searched a total of 14 locations, including the offices of the licenced corporations, as well as residences of the arrestees. The ICAC also arrested six men and two women, aged between 35 and 60. The arrestees included, among others, senior executives of the two licenced securities firms and the licensed hedge fund management firm, as well as a middleman (Note 2).

It is suspected that senior executives of the licenced securities firms had accepted bribes over $4 million from the owner of the licensed hedge fund management firm for disclosing confidential information regarding share placements of various Hong Kong-listed companies before such information was publicly announced.

Armed with such confidential information, the licensed hedge fund management firm established short positions for its hedge fund in the relevant stocks by short selling the stocks in the market and/or entering into short equity swap contracts. When the share placements were publicly announced, the share prices of the concerned stocks declined, and the hedge fund allegedly made profits of around $315 million from its short positions.

The joint operation stemmed from the SFC’s initial investigation of the suspected insider dealing activities, which uncovered potential corruption. The case was subsequently referred to the ICAC for investigation into suspected corruption, while the SFC focused on insider dealing and other misconduct under the Securities and Futures Ordinance.

As the investigation is ongoing, no further comments will be made by the SFC and the ICAC.

End

Notes:

The joint operation was conducted under the arrangement of the Memorandum of Understanding signed between the SFC and the ICAC.
The individuals involved are suspected of breaching the provisions under the Prevention of Bribery Ordinance, including offering advantages to agents and agents accepting advantages (i.e., offering and acceptance of bribes). Additionally, they are also suspected of committing offences under the Organized and Serious Crimes Ordinance, specifically handling property known or believed to represent proceeds of indictable offences (commonly known as “money-laundering”), offences under the Securities and Futures Ordinance involving insider dealings and other relevant crimes and misconducts.

Page last updated 12 Mar 2026