Chinese-funded investment banks under investigation in Hong Kong: What happened?

On March 12, Guotai Junan International announced that on March 10, 2026, the Hong Kong Securities and Futures Commission and the Hong Kong Independent Commission Against Corruption visited the Hong Kong office with search warrants to seize several documents.

Subsequently, an employee of the institution was detained for investigation by the ICAC. Guotai Junan International stated that they attach great importance to this matter and will closely monitor its development.

Earlier, according to Caixin, the ICAC and the Hong Kong Securities and Futures Commission recently conducted joint enforcement actions, executing surprise searches at the Hong Kong offices of two Chinese-funded brokerages. The ECM (Equity Capital Markets) manager of Guotai Junan Hong Kong was taken away to assist with the investigation.

It should be noted that the ECM team is mainly responsible for core equity financing activities such as Hong Kong IPO pricing, share placements, and refinancing. This is also why the market generally links this investigation to Hong Kong IPOs and share placements.

An anonymous source told Xinfeng that the investigation into Guotai Junan’s personnel in Hong Kong was triggered by suspected insider trading activities.

It is worth mentioning that insider trading in the Hong Kong stock market has historically been more common in privatization projects.

A Hong Kong investment banker pointed out, “It depends on the internal organizational structure of the investment bank. In many Chinese-funded brokerages’ Hong Kong subsidiaries, privatization projects may involve ECM participation or even lead the execution.”

The Hong Kong market has long been cracking down on insider trading.

Since the second half of last year, multiple personnel from the Hong Kong Stock Exchange, the Securities and Futures Commission, securities brokers, and online influencers have been investigated for insider trading.

In February this year, the SFC disclosed a case involving suspected insider trading, involving former HKEX listing assistant vice president Chen Zhenghua and others.

This strong action by Hong Kong regulators may help further stabilize the fairness of trading in the Hong Kong stock market.

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