Wash Trade Arranged by Fund

As announced on 27 Dec 2018, SFC reprimanded and fined Ardon Maroon Fund Management (Hong Kong) Limited (now known as China Silver Asset Management (Hong Kong) Limited) $800,000 for cross-trade related failures in managing Ardon Maroon Asia Master Fund (AM Fund).

On 8 Aug 2014, Ardon Maroon gave instructions to one of its brokerages to execute

a cross trade for 15 million shares of a listed company on SEHK, which resulted in AM Fund conducting a wash trade and incurring transaction costs totalling $133,056. In respect of the cross trade ordered by Ardon Maroon, AM Fund was both the buyer and seller of the relevant shares.

Ardon Maroon then instructed another brokerage, which received 48 million shares of the same company, to deliver 15 million of such shares to settle the wash trade. 

Ardon Maroon claimed that the cross trade was conducted for the purposes of moving

shares between the two brokerages so as to reduce margin requirement at the

brokerage receiving the 48 million shares and achieve better financing at the

brokerage conducting the cross trade.

Use of wash trade for share transfer purpose is ridiculous!