2025 saw sustained, high‑impact enforcement in Hong Kong, with the Securities and Futures Commission (SFC) prioritizing insider dealing, market manipulation and unlicensed activities, and deploying injunctions and criminal prosecutions to protect market integrity.
Enforcement leadership transition at the SFC entails continued emphasis on streamlined but focused investigations. Collaboration between authorities deepened, as evidenced by the SFC’s joint operation with the Independent Commission Against Corruption (ICAC) to combat corrupt activities and collaboration with the Stock Exchange of Hong Kong Limited (HKEX) to secure disciplinary outcomes against listed companies and management.
The Legislative Council passed Hong Kong’s first cybersecurity law for critical infrastructure, effective January 2026, introducing mandatory incident reporting and criminal penalties. Virtual assets remain a priority, with criminal charges in the high-profile JPEX case and expanded SFC warnings. Looking ahead, expect further virtual asset regulation, increased focus on strong audit responsibility as a defense against fraud, phased data privacy law reforms, and increased investigation of fraud in the digital assets sector.
Active enforcement and regulatory collaboration in Hong Kong
Authorities in Hong Kong remain very active in their investigation of misconduct and white-collar crime.
Mr Michael Duignan became the SFC’s Executive Director of Enforcement on November 1, 2025. The SFC’s enforcement team is expected to continue streamlining its investigation resources and focusing on the key cases essential to maintaining market integrity under new leadership.
The focus of the SFC on high-impact cases aims to address key risks in financial markets and sends a strong deterrent message to the market. In the quarter ending June 30, 2025, the SFC conducted 501 investigations on corporate disclosures, corporate misgovernance, insider dealing, intermediary misconduct, market manipulation, and unlicensed activities. It reflects a trend of steady uptick in the total number of investigations in the past year, with insider dealing and intermediary misconduct being the areas of the biggest growth.
Disciplinary action was taken by the SFC against 17 individuals and seven corporations, resulting in total fines of HKD96.7 million (around USD12.4m) in 2024/2025.
Insider dealing and other market misconduct SFC enforcement remains prominent, for example:
- Criminal proceedings against a former chairman and controlling shareholder of a Hong Kong-listed company charged with insider dealing.
- Multiple court injunctions to restrain the disposal of assets of suspected ringleaders in sophisticated ramp and dump cases, as well as assets intended for compensation for affected investors, as part of ongoing investigations and legal proceedings.
- Criminal proceedings against two individuals involving illegal short selling in the shares of 28 Hong Kong-listed companies.
Those subject to statutory investigation powers are reminded to comply as authorities continued to show their readiness to enforce against non-compliance:
- The Hong Kong Competition Commission (HKCC) in February 2025 secured its first criminal conviction of an individual who attempted to delete relevant documents and information during a dawn raid.
- While the HKEX has issued statements on director unsuitability since July 2021, in August 2025 it took its first-ever disciplinary action against two former directors of a listed company for failing to cooperate with investigations conducted by the SFC and the HKEX. The strategic collaboration between the SFC and the HKEX achieved regulatory outcomes by leveraging the HKEX’s disciplinary powers under the Listing Rules, with the HKEX stating that, in its opinion, each of the directors was unsuitable to occupy a position as director or within senior management of the relevant company or any of its subsidiaries. The SFC’s investigation is ongoing and may lead to criminal liability if contraventions under the Securities and Futures Ordinance are established.
Regulatory and enforcement authorities in Hong Kong often cooperate. For example, the SFC and the ICAC in July 2025 conducted a joint operation against a sophisticated syndicate suspected of manipulating shares of a listed company and engaging in corrupt activities. During the joint operation, the SFC and the ICAC searched 14 locations, including the offices of the listed company and SFC-licensed brokers. The ICAC arrested a former chairman and a former executive director of the listed company. Listed companies should ensure they are prepared for dawn raids by authorities and criminal investigations against senior management.
The Hong Kong authorities continue to work closely with their counterparts in other parts of China and abroad. The UK Financial Conduct Authority assisted in the SFC’s investigation of a Hong Kong company suspected of fraudulent or deceptive schemes and the disclosure of false information in the initial public offerings of certain listed companies. The SFC met with Asia-Pacific securities regulators at the 50th International Organization of Securities Commissions Annual Meeting in Doha, Qatar to discuss emerging trends and risks faced by capital markets in the APAC region, at which they reached an agreement on closer collaboration to combat online investment scams.
New laws on cybersecurity give rise to new investigative powers and criminal offenses
New corporate criminal offenses were introduced when Hong Kong’s Legislative Council passed the Protection of Critical Infrastructures (Computer Systems) Bill on March 19, 2025. This landmark legislation, which is set to take effect on January 1, 2026, aims to enhance cybersecurity and minimize disruptions caused by cybersecurity incidents to Hong Kong’s critical and essential services.
The new law seeks to regulate large organizations responsible for critical services, requiring them to secure their critical computer systems and report computer system security incidents within a prescribed timeframe. Organizations will be subject to criminal fines of up to HKD5 million (around USD640000) for violations.
The law applies to critical infrastructure operators (CIs) designated by a new Commissioner’s Office, which will be given extensive powers to investigate computer system security incidents and offenses. CIs will cover two major categories:
(a) infrastructure in the following eight essential services sectors: (i) energy; (ii) information technology; (iii) banking and financial services; (iv) air transport; (v) land transport; (vi) maritime transport; (vii) healthcare services; and (viii) telecommunications and broadcasting services; and
(b) other infrastructure for maintaining critical societal and economic activities, such as major sports and performance venues.
For more details, see Hong Kong passes its first Cybersecurity Law to safeguard critical infrastructure.
In addition, the Banking Ordinance was amended in November 2025 to establish a voluntary mechanism for banks to share information on customers suspected of money laundering, terrorist financing, and financing of proliferation of weapons of mass destruction, with safe harbor from prosecution or civil liability for such disclosure. Banks and law enforcement agencies will be able to investigate such conduct and act swiftly to intercept illicit funds and expedite intelligence gathering so that the public will be better protected from fraud and associated money laundering activities.
Sectors under scrutiny: virtual assets and construction
Active enforcement in the virtual assets sector is expected to continue into 2026 as Hong Kong seeks to establish itself as a credible virtual assets hub with investor protection:
- In connection with an alleged fraud scandal surrounding cryptocurrency trading platform JPEX, the HKPF in November 2025 charged 16 individuals, including core members of JPEX, individuals involved in over-the-counter operations, social media influencers, and nominee account holders. Three individuals were placed on Interpol Red Notice.
- Apart from collaborating with the HKPF in monitoring and investigating illegal activities involving virtual assets, the SFC also raised public awareness by publishing new warnings against 46 websites and nine entities relating to suspicious trading platforms in 2025.
The construction sector is a key ABAC focus for the ICAC. In April 2025, it charged a director of a subcontractor for allegedly accepting over HKD1 million (around USD130,000) in bribes from 21 construction workers to facilitate their employment. In November 2025, a senior construction manager of a developer and five directors and staff of four contractors were sentenced to imprisonment ranging from six to 30 months for bribery. The manager had accepted advantages of about HKD180,000 (around USD23,000) in exchange for disclosure of internal documents and information to assist contractors in the tender for various construction projects. Meanwhile, two ex-bank managers in Hong Kong face charges laid by ICAC for using false instruments and one faces a charge of bribery for accepting cryptocurrency worth USD470,000 for authenticating false instruments paid in connection with an overseas fintech company operating a digital platform to facilitate insurance-linked securities transactions.
Meanwhile, the HKCC marked a decade of competition law enforcement and continues to focus on a wide range of sectors which directly impact consumers. Its areas of interest during 2025 included building maintenance, cleansing services, online food delivery, and swimming pool services.
Predictions for 2026
- Virtual assets: The Hong Kong Government is expected to develop further a legislative framework for virtual asset trading and custody. The SFC concluded its consultation and actively reached out to the virtual asset community to understand the business models of asset managers, market makers, broker dealers, and traders as well as the operation flow for efficient and AML-compliant conversion between fiat currencies and cryptocurrencies. This is a key area identified by the SFC and legislation is expected to be prioritized although no definite timeframe has been given.
- Strong audit responsibility as a defense against fraud: There has been increased scrutiny of the accounting profession over the past few years, as inadequate audit often conceals fraudulent conduct and corporate failures within listed and other companies. This trend is expected to continue. The Accounting and Financial Reporting Council (AFRC), the independent regulator of the accounting profession, is becoming increasingly active in its investigation and sanction of auditing/reporting irregularities or misconduct to hold accounting professionals responsible. In 2025, the AFRC reprimanded and fined a total of six audit firms and 11 individuals for audit failures and non-compliance, representing a notable uptick from previous years, while ICAC charged four audit and consultant staff of an accounting firm and its sister company for allegedly conspiring together to defraud Hong Kong Exchanges and Clearing Limited to approve the listing application of a Macao construction firm by preparing a false accountants’ report showing its business growth.
- Cybersecurity and data breaches: As businesses increasingly rely on electronic systems and digital platforms, the risk of cybersecurity and data breaches will continue to rise. In-house teams will need to focus on cybersecurity measures and get ready to swiftly respond to incidents, including complying with all applicable reporting obligations. This is particularly relevant in 2026 as the new cybersecurity law comes into effect in Hong Kong.
- Fraud in the crypto sector: With the anticipated growth of the crypto economy and the intermediation of cross-border participants in the sector, there will be an increase in the incidence of fraud. Authorities and regulatory bodies are expected to step up their efforts on the protection against and investigation of fraud in this new era, while several high-profile civil recovery actions are already before the Hong Kong courts.
- Adoption of artificial intelligence (AI) and machine learning: The use of AI and machine learning in investigations will become more prevalent. While these technologies can help to enhance the efficiency and effectiveness of investigations, such as reducing time spent on voluminous document review, they would also give rise to heightened risks in areas such as personal data and intellectual property rights.
Legal directory quotes
- “Hugely experienced Hong Kong-based disputes team with a distinguished track record acting for high-profile banking and corporate clients on contentious matters. The firm also offers expertise in regulatory investigations and mis-selling claims, leveraging the strength of its fraud, white-collar crime and money laundering practices. It is particularly noted for its work on multi-jurisdictional disputes across the Asia-Pacific region.”—Chambers Greater China 2025: Dispute Resolution: Litigation (International Firms)
- “Offers a strong contentious offering, including handling high-profile SFC and CSRC investigations.”—Chambers Greater China 2025: Financial Services (International Firms)
- “Matt Bower gives excellent tactical and practical advice, and is very sensitive to the needs and objectives of clients.”—Legal 500 2025: Dispute Resolution: Litigation—Hong Kong
- “Melody Chan leads matters ranging from cross-border debt recovery actions to regulatory litigation for major technology clients.”—Chambers Greater China 2025: Dispute Resolution: Litigation (International Firms)
This article is part of the A&O Shearman Cross-border white-collar crime and investigations review 2026.
