Hong was among the witnesses called to testify at the long-running trial of John Soh Chee Wen and Quah Su-Ling. They are alleged to have manipulated the three penny stocks through a web of trading accounts belonging to associates such as Hong. In the subsequent crash, some $8 billion in market value vapourised.
When the three penny stocks, Blumont Group, Asiasons Capital and LionGold Corp crashed suddenly in early October 2013, James Hong Gee Ho was hit in more ways than one.
Firstly, as an executive director of Blumont, Hong bears a fiduciary duty to the company and its shareholders. Secondly, having pledged a substantial amount of Blumont and other shares he owned to Goldman Sachs, the subsequent forced selling decimated Hong’s own net worth by around US$50 million. And that figure did not include what he owed to various other banks and brokers. On July 24, 2014, Hong was made bankrupt.
