Hong Kong's Court of First Instance has, at the behest of the Securities and Futures Commission, has ordered some boiler room fraudsters to compensate 14 investors who fell victim to their deception.

The SFC told the court that three unlicensed entities, which purported to be based in and operating from Hong Kong, used emails and cold-calling to find investors who would open trading accounts and invest in securities and futures products through their websites at various times in 2014.  

The three entities involved in the boiler room scams are:

• Cardell Limited and/or Cardell Company Limited (Cardell), which used the website www.cardell-limited.com
• Waldmann Asset Management (Waldmann), which used the website www.waldmann-asset-management.com and/or www.waldmann-asset-management.net
• Doyle Hutton Associates (Doyle), which used the website www.doyle-hutton-associates.com and/or http://doyle-hutton-associates.net

The court found that none of the trades in securities and futures that the fraudsters purported to conduct on behalf of the investors were ever executed on any recognised exchange, nor have these investors been able to recover any of their monies.

The investors were also asked to deposit funds for their investments into various Hong Kong bank accounts held by the following companies:

• Cedan Limited (Cedan)
• Hamtron Limited (Hamtron)
• Cardan Limited (Cardan)
• Mutual Hope Limited (Mutual Hope)

Long ago in 2016, the SFC obtained injunctions to freeze these monies.

The court found Cardell, Waldmann and Doyle guilty of breaking ss109 and 114 Securities and Futures Ordinance, having promised that they were prepared to carry out regulated activities in securities and futures contracts advisory services and asset management services, while in fact having no licences at all.

The court also found that Cedan, Hamtron, Cardan and Mutual Hope have aided, abetted or assisted Cardell, Waldmann and Doyle in their contraventions of the ordinance. An administrator has been appointed to administer the process of distributing the proceeds of the boiler-room frauds that remain in the four frozen Hong Kong bank accounts – approximately HK$600,000 or US$76,582 – for the benefit of the 14 victims on a pro rata basis.