Introduction

The Securities and Futures Commission (“SFC”) published its Enforcement Reporter (Issue No. 6) in October 2025 (the “Report”), highlighting the regulator’s intensified efforts to combat financial scams in the digital age. With scam-related complaints surging year-on-year and fraud tactics becoming increasingly sophisticated, the SFC has adopted a multi-faceted strategy involving technology, cross-sector collaboration, enforcement action, and investor education. This newsletter summarises key themes from the Report, focusing on the SFC’s integrated approach, practical investor guidance, the newly launched Anti-Scam Consumer Protection Charter 3.0, and notable enforcement cases.

Multi-pronged approach to combat scams

To address the increasing threat of scams, the SFC employs a combination of technological tools, regulatory alerts, partnership frameworks, and public outreach to detect, disrupt, and prevent scams. Key initiatives include:

1.        The social media monitoring system (“SENSOR”): SENSOR is an AI-powered social media monitoring tool that scans platforms for misleading promotions, coordinated market manipulation (e.g., “ramp-and-dump” schemes), and suspicious “finfluencer” activity. This system aims to actively monitor social media platforms and local forums for potential indicators of financial scams, including misleading investment promotions and coordinated stock manipulations.

 

2.        Alert list: The Alert List is a publicly accessible database on the SFC website that flags suspicious virtual asset trading platforms, investment products, websites, and unlicensed entities targeting Hong Kong investors. Entities are added to the Alert List based on prima facie evidence of potentially suspicious schemes. Should further evidence indicate misconduct with a substantial connection to Hong Kong, the SFC may consider initiating a formal investigation.

 

3.        Takedown protocols with social media platforms: The SFC has started its first takedown protocol since October 2024, which is a set of formal procedures established with major platform operators to report and remove fraudulent content, including unauthorised investment advertisements, impersonation of licensed entities, and profiles of convicted “finfluencers”.

 

4.        Education and outreach: The SFC’s “Don’t be Sucker (咪做水魚)” campaign uses relatable characters and interactive events (e.g., game booths at the Anti-Crime Elite Games 2025) to raise public awareness of common scam tactics.

Practical tips for investors against scams

In the Report, the SFC emphasises that investors must remain vigilant in the digital environment. Key recommendations include:

1.        Protect your personal information: Never share passwords, bank details, or identification numbers through unverified channels. Legitimate financial institutions will not request confidential data via insecure means.

 

2.        Be sceptical of unsolicited calls or messages: Be sceptical of unsolicited investment opportunities received via social media, SMS, or messaging apps. Investors should remember that legitimate financial institutions will never ask for confidential information via insecure channels.

 

3.        Beware of “too-good-to-be-true” investments: Be especially wary of offers that seem “too good to be true” on social media or messaging apps.

 

4.        Check URLs and links carefully: Check website addresses carefully for misspellings or unusual domain names. Avoid clicking links from unknown sources; instead, type official website addresses directly.

 

5.        Avoid depositing funds to individual bank accounts: Avoid transferring funds to personal or third-party bank accounts. Use only authorised payment methods provided by licensed entities.

 

6.        Stay informed about latest scam trends: Follow SFC and Hong Kong Police Anti-Deception Coordination Centre alerts to keep abreast of emerging scam trends.

Anti-Scam Consumer Protection Charter 3.0

In July 2025, the SFC, the Hong Kong Monetary Authority, the Insurance Authority, and the Mandatory Provident Fund Schemes Authority jointly launched the Anti-Scam Consumer Protection Charter 3.0 (the “Charter”), which brings together financial regulators, technology firms, and telecommunications companies in a coordinated fight against scams. The Charter 3.0 promotes continuous dialogue and cooperation among these parties to foster a safe online environment through reporting suspected financial fraud and scams, checking advertisers, internal monitoring processes, enforcement of terms of service and collaboration on public education and awareness. The Consumer Council, the Hong Kong Association of Banks, the Police, and the Office of the Communications Authority strongly supported the initiative of the Charter.

Notable enforcement cases

The Report highlights two recent SFC actions against unlicensed “finfluencers” who use social media to solicit investors:

1.        Wong Ming Chung (also known as Franky Wong): A licensed representative of Tse’s Securities Limited operated a subscription-based Telegram group (a messaging app) where he provided unlicensed investment advice for a fee. He was convicted in June 2024 and suspended by the SFC for 16 months.

 

2.        Chau Pak Yin: Charged with unlicensed advising on securities through a paid Telegram group targeting NASDAQ stocks; his case is ongoing before the Eastern Magistrates’ Court.

 

The SFC reminds investors that such individuals may fail to meet the SFC’s required standards of conduct and accountability, potentially exposing investors to significant risks.

Takeaways

The SFC’s October 2025 Report reflects a regulatory shift towards proactive, technology-driven surveillance and cross-sector cooperation to tackle the borderless nature of modern financial scams. For licensed firms, this means ensuring robust compliance controls around digital communications and third-party promotions. For investors, the emphasis is on vigilance, verification, and ongoing education. As scams continue to evolve, the SFC’s multi-pronged strategy – combining monitoring, enforcement, charter-based cooperation, and public engagement – serves as a critical framework for safeguarding market integrity and investor protection in Hong Kong.

 

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Important: The law and procedure on this subject are very specialised and complicated. This article is just a very general outline for reference and cannot be relied upon as legal advice in any individual case. If any advice or assistance is needed, please contact our solicitors.

Published by ONC Lawyers © 2026