Securities and Futures Commission v Lui Man Wah (呂文華) [2026] 2 HKLRD 1160, [2026] HKCFI 2140 (Esmond Wong)
Esmond Wong represented the 9th and 10th defendants in Securities and Futures Commission v Lui Man Wah [2026] 2 HKLRD 1160, [2026] HKCFI 2140.
C was a company listed on the GEM board of the Stock Exchange of Hong Kong. Between 12 January 2022 and 15 June 2022, shares in C were traded at a substantially higher price and increased average daily trading volume than before, until the share price collapsed on 15 June 2022, closing at approximately 93% lower than the closing price on the previous day. Upon investigation, the Securities and Futures Commission (the SFC) claimed that D1-3 orchestrated, and together with D4-16 and others (collectively, “the Syndicate”), carried out a “ramp-and-dump” scheme (the Scheme) in contravention of ss.274, 295 and 300 of the Securities and Futures Ordinance (Cap.571) (the SFO). Under the Scheme, the Syndicate acquired a substantial stake in C through two placings of shares (the Placings) at discounted prices; aggressive purchase orders were placed to ramp up the price of the shares; the shares were then offloaded to other market participants whilst purported investment advice was disseminated via social media. Innocent market investors incurred losses totalling $394,067,589. In April 2023 and August 2025, the SFC issued restriction notices (the RNs), restraining various securities firms from permitting suspect traders (including D4-16) from operating accounts held with them. In August 2025, the present proceedings were commenced by the SFC against Ds, seeking, among others, restoration orders and/or compensation orders. The SFC also took out a summons (the Summons) for interim injunctions against Ds, restraining them from dealing with certain of their assets pending the determination of these proceedings under s.213 * of the SFO, and ancillary disclosure orders. Some Ds did not oppose the Summons, and D14 gave an undertaking that the proceeds arising from the sale of his landed property in Hong Kong be transferred or deposited into a stakeholder’s account maintained with his solicitors until the final determination of the Summons. This was the hearing of the Summons against D2, D4, D5, D9, D11 and D14.
Held, granting the injunctions but refusing ancillary disclosure orders, that:
Application for interim injunctive relief
- (1) In s.213 proceedings, the SFC acted not as a prosecutor in the general public interest but as protector of the collective interests of the persons dealing in the market who had been injured by market misconduct. For the grant of a statutory interim injunction under s.213, the SFC must establish a prima facie case that s.213(1) was engaged. There must be an appreciable, not a fanciful, risk that without the injunction, proper compliance under the SFO would be frustrated. The court should ask if the injunction would have some utility or serve some purpose within the contemplation of the SFO. As for utility, the circumstances which may move the court to grant such injunction could not be circumscribed. Traditional equitable principles that governed the granting of interlocutory injunctions did not limit the scope of the exercise of the statutory power, but they provided a sound basis for a preliminary assessment (Australian Securities and Investments Commission v Mauer-Swisse Securities Ltd (2002) 42 ACSR 605, Securities and Futures Commission v A [2008] 1 HKC 89, Securities and Futures Commission v C [2009] 4 HKLRD 315, Securities and Futures Commission v Tiger Asia Management LLC (2013) 16 HKCFAR 324, Securities and Futures Commission v Qunxing Paper Holdings Co Ltd (No 2) [2018] 1 HKLRD 1060 applied). (See paras.28-34.)
- (2) The SFC had demonstrated a prima facie case that each of D2, D4, D5, D9, D11, and D14 was involved in the Scheme by false trading and the use of fraudulent or deceptive devices in relation to the shares under ss.274, 295 and 300 of the SFO. In establishing a prima facie case of market manipulation under s.213 at the interlocutory stage in the present application: (See para.62.)
- (i) it was unnecessary for the SFC to produce direct evidence that D2 was the mastermind of the Scheme or was directly involved in every stage of it; (See para.43.)
- (ii) it was unnecessary to examine whether the SFC had produced sufficient compelling evidence to justify the inferences or fraud or misconduct at this stage; and (See para.53.)
- (iii) D5’s argument that the claim against her was confined to a claim which was akin to a common law conspiracy claim was rejected. Section 213(1) prescribed different scenarios in which the court may exercise its power to make one or more of the orders specified in s.213(2), one of which was s.213(1)(a)(v) where a person attempted or conspired with others to commit any contravention in s.213(1)(a)(i). Here, the SFC pleaded that each of Ds fell within s.213(1)(a)(i)(A), (ii)-(v) and (2)(b), and also pleaded a wide range of remedies under s.213. (See paras.47-50.)
- (3) The SFC had established a prima facie case on quantum that each of Ds was liable up to the total amount of loss suffered by the innocent market investors. The power of the court to make a restorative order under s.213(2)(b) of the SFO was very wide and flexible, and the value of the property to be subject to restraint under s.213(2)(c) would be by reference to the anticipated action that may be taken regarding the breach. There was a reasonable argument that it was desirable for each of the persons involved in the market misconduct to be liable for the total amount of the loss collectively suffered by the investors. At this stage, the Court was not persuaded that the extent of how much each defendant should be liable should depend on his/her culpability or involvement, and at most be limited to the realised profits made by him/her (Securities and Futures Commission v Tiger Asia Management LLC (2013) 16 HKCFAR 324, Securities and Futures Commission v Qunxing Paper Holdings Co Ltd (No 2) [2018] 1 HKLRD 1060 applied). (See paras.29, 45.)
- (4) The SFC’s claims against each of Ds involved serious misconduct and reflected adversely on their integrity, which would point towards an inference of a risk of dissipation of assets. Further, a key feature of the Scheme was the use of an extensive network of corporate or individual nominees to serve as placees, traders or fund providers. Those involved may be described as persons of low commercial morality and they were likely to dissipate their assets if no injunctive relief was granted. D14 had admitted breaching his undertaking to the Court which further indicated his low commercial morality and strengthened the inference of a risk of dissipation of assets (Securities and Futures Commission v C [2009] 4 HKLRD 315, Convoy Collateral Ltd v Cho Kwai Chee [2020] 6 HKC 81 applied). (See paras.59-63, 65-66.)
- (5) The injunction sought did have utility as the individuals’ assets were identified, which may be used to compensate the innocent market investors should the SFC succeed in its claim; and would replace the RNs which were not supposed to be kept in place until trial. (See paras.70-71.)
- (6) The SFC instituted these proceedings in its capacity as a protector of public investors. The Court would not exercise discretion against the grant of injunctions just because the SFC was not ordinarily required to provide an undertaking as to damages. Further, there was utility in granting the injunction, despite the long lapse of time between the SFC’s first issuance of its direction to investigate (September 2022) and the date of the Summons (August 2025) (Securities and Futures Commission v A [2008] 1 HKC 89 considered). (See paras.75-76.)
Application for disclosure orders
- (7) When the injunctions were confined to specific assets, they could be policed without any disclosure order. Further, the disclosure orders sought were not ancillary to the injunctions because they sought disclosure of the defendants’ assets which were outside the scope of the injunctions. (See paras.81-82.)
[The above is excerpted from the headnote to the report in HKLRD.]
