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Landmark conviction on insider trading
By Kelvin Wong |
March 13, 2009, Friday
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Print Edition
Print Edition
A former BNP Paribas Peregrine Capital Ltd banker was convicted in Hong Kong's first criminal trial for insider trading, a verdict the special region's securities watchdog hailed as a "landmark decision."
Ma Hon-yeung, a former vice president at the Paris-based bank, will be kept in custody until his sentencing scheduled for April 1, the Securities and Futures Commission said in a statement on its Website late Wednesday. He was tried in a district court.
Hong Kong's regulator is cracking down on insider trading as the city vies with Singapore and Tokyo for the status as Asia's financial center. Until 2003, the offense was only punishable with fines, and since then, a total of five insider trading cases have been brought to court.
"It's a good start in the clampdown on insider trading," said Raymond So, an associate professor at the Chinese University of Hong Kong's department of finance. "But bear in mind it's only a small trade on a small company. Let's see if the SFC really has the tenacity to go after the big players."
Insider dealing carries a maximum prison sentence of 10 years and fines of up to HK$10 million (US$1.3 million) in Hong Kong. The only previous person to have been convicted for insider trading pleaded guilty at a lower-level court, Bloomberg News said.
"Over the last two years, the SFC has stepped up prosecutions against insider dealing," Mark Steward, executive director of enforcement at the SFC, said in the statement. "We will continue to use all our remedies, including more criminal prosecutions, where appropriate, to tackle the unfairness of insider dealing."
The court also convicted four other people, including Ma's girlfriend and three relatives, who were granted bail and ordered to surrender their passports, the statement said.
Ma was found guilty of tipping off the other four about the proposed privatization of Egana Jewellery & Pearls Ltd, a deal he was working on, the statement said.
His co-defendants bought shares in Egana before the deal was announced in July 2006, the statement said.
The SFC didn't say how much the defendants made on the trades. Before 2003, insider-trading charges were heard as civil cases at the Insider Dealing Tribunal, an agency that has the authority to impose fines.
Ma Hon-yeung, a former vice president at the Paris-based bank, will be kept in custody until his sentencing scheduled for April 1, the Securities and Futures Commission said in a statement on its Website late Wednesday. He was tried in a district court.
Hong Kong's regulator is cracking down on insider trading as the city vies with Singapore and Tokyo for the status as Asia's financial center. Until 2003, the offense was only punishable with fines, and since then, a total of five insider trading cases have been brought to court.
"It's a good start in the clampdown on insider trading," said Raymond So, an associate professor at the Chinese University of Hong Kong's department of finance. "But bear in mind it's only a small trade on a small company. Let's see if the SFC really has the tenacity to go after the big players."
Insider dealing carries a maximum prison sentence of 10 years and fines of up to HK$10 million (US$1.3 million) in Hong Kong. The only previous person to have been convicted for insider trading pleaded guilty at a lower-level court, Bloomberg News said.
"Over the last two years, the SFC has stepped up prosecutions against insider dealing," Mark Steward, executive director of enforcement at the SFC, said in the statement. "We will continue to use all our remedies, including more criminal prosecutions, where appropriate, to tackle the unfairness of insider dealing."
The court also convicted four other people, including Ma's girlfriend and three relatives, who were granted bail and ordered to surrender their passports, the statement said.
Ma was found guilty of tipping off the other four about the proposed privatization of Egana Jewellery & Pearls Ltd, a deal he was working on, the statement said.
His co-defendants bought shares in Egana before the deal was announced in July 2006, the statement said.
The SFC didn't say how much the defendants made on the trades. Before 2003, insider-trading charges were heard as civil cases at the Insider Dealing Tribunal, an agency that has the authority to impose fines.
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