Financial Regulatory Forum

Tiger Asia case has exposed Hong Kong regulator’s enforcement reach, say lawyers

The latest edition of Hong Kong dollar notes during an exhibition in Hong KongBy Ajay Shamdasani

HONG KONG/NEW YORK, Sept. 15 (Thomson Reuters Accelus) – The Hong Kong securities regulator’s legal troubles in bringing disciplinary action against New York-based hedge fund Tiger Asia Management has shown the limitations of its regulatory reach and signalled that funds may be safer operating from offshore, according to a source close to the proceedings. The source, a senior local financial lawyer close to the case, said that his advice for foreign funds that did not need to be licensed and regulated in Hong Kong was to forgo doing so in order to reduce the risk of disciplinary action by the territory’s Securities and Futures Commission.

The SFC is locked in a legal battle over its disciplinary action against Tiger Asia and three of its officers — Bill Sung Kook Hwang, Raymond Park and William Tomita — first taken in August 2009. The SFC alleged the hedge fund and its senior management breached local market misconduct and insider dealing rules during a placing of China Construction Bank shares in Hong Kong in early 2009, earning itself a profit of $29.9 million.  (more…)

Insider Trading: Hong Kong’s Not So Smooth Criminals

Hong Kong's central financial district's (L-R) Bank of China Tower, Cheung Kong Centre, HSBC headquarters, Standard Chartered Bank and Legislative Council (front L) are pictured lighted up before Earth Hour, March 26, 2011. REUTERS/Bobby YipBy Helen H. Chan (Hong Kong)

(Business Law Currents) – The Hong Kong Securities and Futures Commission (SFC) is putting the clamp on white collar criminals. Seeking to deprive convicted offenders of their freedom as well as their illicit gains, the watchdog is cracking down hard on insider dealing in the special administrative region. Recent disciplinary actions initiated by the watchdog are sending a strong message that all inside deals, even small missteps, will be prosecuted to the full extent of the law.

As previously told to Compliance Complete by former SFC head Martin Wheatley, the Commission has consciously endeavored to use criminal proceedings to deal with insider dealing in Hong Kong. The watchdog’s increasingly tough stance has put companies of all sizes on high alert. (more…)

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