In the recent case of Chen Wencan and Another v. Secretary For Justice and Another, the Court of First Instance (CFI) has dismissed a judicial review application against the Securities and Futures Commission (SFC) relating to restriction notices issued in an ongoing investigation into a suspected “ramp-and-dump” scheme. The Applicants contended that the restriction notices issued by the SFC under sections 204(1)(a) and 205(1) of the Securities and Futures Ordinance (SFO) to freeze their assets in various trading accounts held with certain licensed corporations on the basis of section 207(e) of the SFO was unconstitutional as it (i) was not prescribed by law and (i) was a disproportionate interference with their property rights.
The CFI noted in this judicial review that similar issues had been dealt with earlier in the case of Tam Sze Leung and Others v Secretary for Justice and Another. The CFI is not persuaded that there are any significant differences raised by the Applicants which point to any reason why a different view should be taken. The below is the summary of the court’s reasoning in Tam Sze Leung:
To conclude, albeit restriction notices are (i) issued against the licensed corporation (as the subject of the restriction) which is not accused of any wrongdoing and (ii) highly intrusive to the individual’s property rights, the recent judgment reaffirms the SFC statutory powers to issue restriction notices, in allowing the SFC to serve the important function of protecting the investors and the public interest.
  HKCFI 796; See https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=151339&currpage=T.
  HKCFI 2330; See https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=147488&currpage=T.