Key facts
- Hong Kong police are investigating ZD Group for alleged fraud.
- The investigation follows the firm's default on retail investment products tied to Hong Kong IPOs.
- Twenty-four investors have reported losses to the police.
- The case is being handled by a regional crime unit, and no arrests have been made.
Hong Kong police have launched a fraud investigation into wealth management firm ZD Group after it defaulted on retail investment products linked to local initial public offerings. Police confirmed on Wednesday that they had received reports from 24 investors as of Monday. A regional crime unit is handling the case, and no arrests have been made. The default highlights concerns about unregulated wealth managers pooling capital from mainland China to invest in Hong Kong IPOs, potentially engaging in pump-and-dump schemes.