Hong Kong 26-Year-Old Trader Misappropriates HK$50 Million to Bet Big on Hynix ETF, Suffers HK$150 Million Loss
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Hong Kong 26-Year-Old Trader Misappropriates HK$50 Million to Bet Big on Hynix ETF, Suffers HK$150 Million Loss
According to Tencent News "YiXian", a 26-year-old male trader at Hong Kong Zhi Fu Management Services Limited misappropriated 50 million HKD of company funds as margin without authorization between January 9 and July 20 this year, using financing leverage to heavily buy the HKEX-listed CSOP 2x Long SK Hynix ETF (07709.HK), ultimately resulting in paper losses of up to 150 million HKD. Driven by the memory chip theme, the ETF surged to a historical high of HKD 193.65 at the end of June this year, but subsequently the semiconductor sector corrected sharply. As of July 20, it had plummeted to HKD 52.58, a decline of over 72%. Hong Kong financial professionals analyzed that the combination of double leverage from margin financing and the 2x Long ETF was the main reason why the 50 million principal turned into a 150 million huge loss. The incident was uncovered during the company's recent audit. The man involved was arrested by the police on July 20 on suspicion of "theft". Currently, the relevant stock positions have not yet been forcibly liquidated, and the final loss remains uncertain. After the incident, some clients of Zhi Fu Securities made risk-avoidance withdrawals.
Navigating Web3 tides with focused insightsTechFlow news, July 27, according to Tencent News "YiXian", a 26-year-old male trader at Hong Kong Cheung Fu Management Services Limited unauthorized misappropriated HK$50 million of company funds as margin between January 9 and July 20 this year, aggressively buying the CSOP Hynix 2x Daily Leveraged Product ETF listed on the HKEX (07709.HK) through financing leverage, ultimately resulting in paper losses of up to HK$150 million.
Driven by the memory chip concept, the ETF surged to a historical high of HK$193.65 at the end of June this year, but subsequently the semiconductor sector corrected sharply, plummeting to HK$52.58 by July 20, a drop of over 72%. Hong Kong financial analysts analyzed that the compounding of double leverage from margin financing and the 2x long ETF was the main reason why the HK$50 million principal turned into a huge loss of HK$150 million.
The incident was uncovered during the company's recent audit, and the involved man was arrested by the police on July 20 on suspicion of "theft". Currently, the relevant stock positions have not yet been forcibly liquidated, and the final loss remains uncertain. After the incident, some Cheung Fu Securities customers initiated risk-avoidance withdrawals.
