Hong Kong’s securities watchdog is ready to assist the police in its investigation of alleged manipulation of Next Digital’s stock, according to a statement released after widespread ridicule of the police’s lack of financial knowledge.

Market misconduct offences often involve “complex questions of law and evidence” and the need for “expert evaluation in relation to securities market functioning, trading methods and investor behaviour,” the Securities of Futures Commission statement read.

The SFC said it felt it was in the public interest for it to clarify its position as Hong Kong’s securities markets regulator.

The statement came after the police was ridiculed for its lack of financial knowledge after it announced on Facebook that 15 people were arrested for “shorting” shares of Next Digital, the publisher of Apple Daily.

Netizens pointed out that Next Digital was not on the Hong Kong Stock Exchange’s designated list of securities eligible for short selling. The police issued a correction on Friday and changed the term “shorting” to “selling.”

Short selling refers to the sale of a stock that a person does not presently own. It can be done by borrowing stock from an existing holder and paying a collateral fee of at least 105% of the value. In Hong Kong, only stocks on the HKEX’s designated list can be sold short.

Comments under the police’s Facebook post showed some netizens ridiculing the force for lacking basic financial knowledge.

“They don’t even know the difference between selling and short selling,” one internet user wrote. “They are becoming an international laughing stock.”

Fifteen people were arrested on Thursday in relation to the mass buying of Next Digital shares following the raiding of Apple Daily’s newsroom last month. They were accused of falsifying an impression of heated trading to lure retail investors before selling the shares when the price soared.

The share price of Next Digital rose by 2,000% on Aug. 11, a day after the publication’s office in Tseung Kwan O was raided by police.

Next Digital’s stock prices remained volatile on Friday, first falling over 30% from its opening price of HK$0.49 (US$0.06) and then recovering slightly in the morning before closing at HK$0.33.

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