Hong Kong 26-Year-Old Trader Misused $200 Million TWD in Company Funds to Bet on SK Hynix, Causing $620 Million TWD Loss and Arrest

Not only Taiwan stocks, but global stock markets have recently suffered significant declines. South Korea's market, led by memory giants Samsung and SK Hynix, has been especially hard hit, with leveraged positions being repeatedly wiped out amid the crash.

According to Hong Kong media reports, a 26-year-old securities trader in Hong Kong misappropriated HK$50 million (approximately NT$200 million) in company funds to bet on a 2x leveraged ETF for SK Hynix. The subsequent stock price plunge caused the company to suffer losses of HK$150 million (approximately NT$620 million). The trader was arrested by police on suspicion of theft.

The report states that at a securities firm in Central, Hong Kong, a 26-year-old trader surnamed Yuan, who had been employed for only six months, unauthorizedly used HK$50 million from the company's account as margin funding between January 9 and July 20 of this year to purchase the 'CSOP SK Hynix Daily Leverage (2x) ETF' (Hong Kong stock code: 7709).

Due to the sharp drop in share price, the company incurred a paper loss of HK$150 million. During an audit and accounting review, the company discovered irregularities. A 36-year-old female director surnamed Wang then reported the incident to the police. Upon arrival, the police arrested Yuan on suspicion of theft, and the case is now being handled by the Central District Police Criminal Investigation Division, Unit One.

SK Hynix's share price has continued to plummet recently, causing heavy losses for leveraged investors. (Photo source: AP)

Margin Financing + 2x ETF = 'Double Leverage' — Share Price Crashes from 190 to 30 HKD

The report notes that the share price of this '2x Long SK Hynix' leveraged ETF peaked at 193.65 HKD at the end of June but then steadily declined. By July 20, just before the incident was discovered, the price had dropped to 52.58 HKD — a decline of over 72%. It is understood that the company has not yet closed its position, and as of today, the ETF has further plunged to around 30 HKD, with losses continuing to expand.

Hong Kong financial experts analyzed that the reason the employee's misappropriated HK$50 million in principal escalated into a massive loss of HK$150 million is due to the 'double leverage' effect — the combination of margin financing and a 2x leveraged ETF. Yuan likely used this margin to leverage hundreds of millions in buying power and may have already held a large position before the ETF's plunge in July.

More exclusive reports from Feng Media: · South Korean retail investors 'borrow to trade stocks' — face margin calls after market crash, 400 billion KRW forcibly liquidated · 'Worst memory shortage in history' to erupt next year? SK Hynix CEO warns: Supply-demand imbalance will remain unresolved after 2030 · Samsung reports strong earnings, so why is its stock crashing? Foreign media highlights 'this number' as failing: investors deeply disappointed