A 26-year-old male trader has been accused of using approximately 50 million Hong Kong dollars (about $6.4 million USD) of his company’s funds as margin without authorization. He allegedly employed margin financing to heavily leverage a two-times leveraged exchange-traded product (ETP) tracking SK hynix (SKHY). The resulting paper losses are estimated to have reached roughly 150 million Hong Kong dollars (about $19.3 million USD).

At 9:53 PM on July 20, 2026, Hong Kong police received a report from a female director of a company located at 19 Des Voeux Road Central, Central, in the World-Wide House. The director reported that a male employee had been using the company’s account for unauthorized investments. Police responded to the scene and arrested a 26-year-old man surnamed Yuen on suspicion of theft. The case is now under investigation by the Central District Criminal Investigation Unit.

According to information released by Tencent News, the suspect was employed at Chief Wealth Investment Limited. The transactions in question spanned from January 9 to July 20 of this year. During this period, the man allegedly used approximately 50 million Hong Kong dollars of company funds as margin. Through this margin, he secured financing of several hundred million Hong Kong dollars from relevant institutions to purchase the CSOP SK hynix Daily Leverage (2x) Product listed on the Hong Kong Stock Exchange, with the ticker symbol 07709.HK. This product is not ordinary SK hynix stock but is a leveraged ETP designed to deliver twice the daily performance of the ordinary shares of SK hynix.

The suspect had been employed at the company for approximately six months, with the unauthorized trading activities occurring throughout nearly his entire tenure. The incident was only discovered during a recent internal audit and account reconciliation process, prompting the company to file a police report.

Police clarified that the reported 50 million Hong Kong dollars refers to the specific company funds allegedly used without authorization. The estimated loss of 150 million Hong Kong dollars is based on the value of the positions at the time of the report. These are separate figures. As of the time of the disclosure, not all positions had been fully liquidated or sold. Therefore, the 150 million Hong Kong dollar figure represents a floating paper loss, and the final amount will depend on subsequent price movements, liquidation costs, and financing fees. Police have not yet released specific details on the number of shares held, the financing multiples, or how the suspect allegedly gained access to the company’s accounts and margin facilities.

Following the exposure of the case, Chief Securities Limited issued a statement clarifying that the arrested man is not an employee of their firm and that Chief Securities is entirely unrelated to the incident. The company emphasized that it is a licensed corporation regulated by the Hong Kong Securities and Futures Commission. It confirmed that client funds are held in segregated trust accounts with custodian banks, and that Hong Kong-listed and US-listed assets are held by Hong Kong Securities Clearing Company Limited and the Depository Trust & Clearing Corporation, respectively.

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