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Syndicates then sell shares in a manner which nets them substantial profits whilst leaving innocent victims with substantial financial losses.

Twelve people - including those believed to be the ringleaders of the syndicate and their associates - were arrested yesterday during a joint search of 27 premises across Hong Kong by more than 160 officers of the SFC and the Police.

The operation followed a lengthy investigation by the SFC. The case was referred to the Police because of the scale of suspected fraud and money laundering offences, in addition to specific market misconduct offences under the Securities and Futures Ordinance.

Prior to the joint operation, the SFC issued 16 Restriction Notices and froze 63 securities accounts which it believes hold proceeds of the ramp and dump schemes belonging to syndicate members. Overall the amount of assets frozen total about $860 million.

Mr Ashley Alder, the SFC's Chief Executive Officer, said: "The SFC is determined to eliminate these ramp and dump schemes which cause harm and distress to those members of the public who are duped by fraudsters. In doing so we will not hesitate to use all the enforcement and supervisory tools at our disposal as well as working closely with the Police. Our joint operation underscores our shared commitment to eradicate serious misconduct to protect the public and maintain the integrity of our market."

The SFC's investigation also highlighted that the vehicles used by the fraudsters to perpetrate ramp and dump schemes are typically small listed companies with a low share price coupled with very thin trading. These companies become targets for fraud as their shares are easier to corner and their share prices can be manipulated with relatively small cash outlays.

"Cracking down on these schemes is one of SFC's top enforcement priorities this year. These schemes also underscore the importance of investor education. The SFC has been working closely with the Police's Anti-Deception Coordination Centre on a series of investor education campaign events which are continuing," Mr Alder said.

Investors should stay vigilant and make informed investment decisions instead of relying on stock tips circulating in chat groups or on social media platforms.