Enigma crash spurs Hong Kong raid
The largest ever raid by Hong Kong’s securities regulator was linked to the multi-billion dollar plunge in nearly three dozen small-cap stocks in June, according to a person familiar with the situation.
One hundred and thirty-six agents from the city’s Securities and Futures Commission recently searched multiple premises, head of enforcement Tom Atkinson said in a speech on Wednesday, without disclosing what triggered the raid.
The search was related to the so-called Enigma Network, the person familiar said, a group of companies whose overlapping ownership ties and bubble-like qualities were publicised by activist investor David Webb in May. The stocks gained widespread attention in Hong Kong after many of them suddenly plunged by as much as 90 per cent on June 27.