Suspected Insider Trading: Two Securities Firms and One Hedge Fund Under Investigation

Hong Kong authorities have launched an investigation into suspected insider trading involving two securities companies and one hedge fund, with eight arrests made in the largest enforcement operation against the financial industry in recent years.

The investigation was announced on Thursday, 13 March 2026, by the local capital markets regulator and anti-corruption agency. Authorities have not disclosed the names of the companies involved. However, securities firm Guotai Junan International stated that its office was raided this week.

Sources familiar with the case identified securities firm CLSA and hedge fund Infini Capital as being part of the investigation. The sources requested anonymity as they were not authorised to speak to the media.

Citic Securities, CLSA’s parent company, disclosed in a filing to the Shanghai Stock Exchange that its Hong Kong subsidiary was inspected on Tuesday. During the inspection, several documents were seized and a member of staff was questioned by authorities. The company stated it is paying serious attention to the matter and will continue to monitor developments. Citic also affirmed that its subsidiary’s operations continue to run normally despite the ongoing investigation.

Citic Securities and Guotai Junan’s parent company are among China’s two largest securities firms. The arrests by Hong Kong authorities reportedly involved senior executives from the companies under investigation.

The investigation was conducted jointly by the Securities and Futures Commission and the Independent Commission Against Corruption. Both regulators declined to provide further details about the identities of the companies involved.

CLSA declined to comment on the investigation. Infini Capital founder Tony Chin has not yet responded to requests for comment from Reuters. Regulatory licensing records show that Chin no longer holds the position of responsible officer at Infini Capital since December 2025, meaning he can no longer conduct regulated asset management services for the company.

The negative sentiment from the case has also weighed on the stock prices of the companies involved. Guotai Junan International shares closed down 4.2%, whilst its parent company Guotai Haitong, listed on the Hong Kong exchange, also declined by the same percentage. Citic Securities shares traded on the Hong Kong exchange fell 1.7%. The case emerges amid a surge in share offerings on the Hong Kong exchange, prompting regulators to intensify oversight of IPO sponsors and share placement agents. Authorities have previously warned securities firms against submitting documents that do not meet standards in the share listing process.

Dickie Wong, executive director of uSmart Securities, stated that the Hong Kong IPO market has returned to being highly active with valuations surging and over 400 companies awaiting listing on the exchange.

Regulators suspect that the hedge fund owner offered bribes exceeding HK$4 million, equivalent to approximately US$511,000, to obtain confidential information about planned share sales by companies listed on the Hong Kong exchange before the information was made public. The information was allegedly used to conduct profitable transactions.

After the share placement was announced to the public, the share price of the company in question actually fell. The hedge fund allegedly reaped profits of approximately HK$315 million through short selling positions.

The joint operation, codenamed “Fuse”, raided 14 locations including company offices and homes of the suspects. The eight people arrested comprised six men and two women.

According to stock exchange data, Hong Kong became the world’s largest equity fundraising centre last year with equity fundraising surging 164% to US$103 billion. The increase was primarily driven by a resurgence in share offerings by Chinese companies.

Infini Capital is known to have actively participated in various IPOs and share placements in Hong Kong. The company has supported several major share offerings, including those from artificial intelligence company SenseTime and Phancy Group.

Infini also signed a strategic partnership with humanoid robot company Ubtech Robotics last year to provide financing of up to US$1 billion. This move was part of the company’s expansion in supporting rapidly expanding technology companies.

Tony Chin is a former Morgan Stanley banker who is now a significant shareholder and board member at numerous startups that have developed into industry leaders. He is also known as the founder of the Hong Kong Bulls professional basketball team, which competes in China’s national basketball league.