“Young Stock Market God” Cites 22 Defenses as Court Principle Tests Line on Illegal Trading

Hsiao Han-sen has offered 22 explanations for the trading activity that prosecutors say generated more than NT$40.69 million from seven listed stocks. He describes the individual orders, cancellations and sales as ordinary market behavior. Prosecutors say the actions formed a recognizable scheme to manipulate prices.

The Taipei District Prosecutors Office argues that the issue does not lie in any single buy order or cancellation. Instead, investigators identified a repeated pattern across all seven stocks: large purchases at high prices on one trading day, huge limit-up buy orders before the next opening, withdrawals around the open, and sales in the opposite direction.

Prosecutor Chen Wen-chin said the presence of market themes in the stocks could explain why Hsiao selected them, but not the wider sequence of trades. If the large buy orders had genuinely been intended to execute, she said, the investor would normally have bought and held the shares. Hsiao allegedly canceled them quickly on multiple occasions while selling at the same time.

Hsiao has described himself as a right-side trader who followed market momentum. He also argues that high-price orders sought better execution opportunities and that pre-opening orders, amendments and cancellations are allowed under the trading system. Those points, he says, cannot by themselves prove an intent to manipulate prices.

The legal debate echoes a High Court ruling in the case of Chung Wen-chih, who argued that Taiwan’s Securities and Exchange Act did not expressly classify Taiwan depositary receipts as securities when the alleged conduct occurred. Citing Constitutional Interpretation No. 680, the court said people need not know with certainty that conduct will be punished. It is enough that the broader legal framework allows them to foresee a possible punishment risk. That principle does not replace the court’s assessment of trading intent and evidence. Whether Hsiao’s 22 defenses can defeat the manipulation allegation remains for the court to decide.