Pan Caihong wanted on Insider Trading Charges

On 23 June 2011, the SFC reported that The Court had issued an arrest warrant for Ms Pan Caihong, a Mainland lawyer, failed to appear in court to face nine counts of insider dealing charges commenced by the SFC.

The SFC alleges that Pan had insider information on a placement of shares in Great World Company Holdings Limited (Great World) and she sold 1,652,000 Great World shares, avoiding a potential loss of about $87,000 just days prior to the announcement.

Further details are available here.

BOC Hong Kong staff arrests in relation to Lehman Brothers

On April 12 Bloomberg reported that BOC Hong Kong had released a statement to the Hong Kong Stock Exchange, stating that two staff had been charged by the city's Commercial Crime Bureau in connection with the sale of structured products linked to Lehman Brothers Holdings Inc. They also reported that a third employee was arrested and hadn't yet been charged.

BOC Hong Kong was the biggest seller of the Lehman Brothers products, and was among a group of 16 banks that agreed a settlement arrangement for victims with the HKMA and the city's Securities and Futures Commission.

The two employees were charged April 8 under provisions of the Securities & Futures Ordinance that make it illegal to "fraudulently or recklessly induce others to invest money," according to the statement.

BOC Hong Kong has said it will make no further comment and it remains to be seen what, if any, comments the various regulators make while the investigation continues.

SFC in Hong Kong bans former fund manager for life

The SFC website reported that it had banned Mr Ryan Fong (formerly from HSZ in Hong Kong) for life following his conviction in relation to insider dealing.  Mr Fong was previously sentenced to 12 months imprisonment in one of the SFC's early prosecutions of financial professionals involved in insider dealing.

The SFC report was:

The Securities and Futures Commission (SFC) has banned Mr Ryan Fong Yen-hwung, a former portfolio fund manager at HSZ (Hong Kong) Ltd (HSZ), from re-entering the industry for life (Note 1).

The disciplinary action follows Fong’s conviction for insider dealing in July 2009 at the District Court (Note 2). Fong was sentenced to 12 months’ imprisonment and ordered to pay a fine of $1,372,218.

The SFC’s investigation found that in 2005, Fong received confidential and price sensitive information about a proposed takeover by JCDecaux Pearl & Dean Ltd of the controlling interests in Media Partners International Holdings Inc (Media Partners) from Mr Allen Lam Kar Fai, a former director of investment banking at CLSA Equity Capital Markets Ltd.

Fong took advantage of the information and purchased Media Partners shares which he then sold at a profit after the announcement of the transaction was made to the public. The misconduct involved coded emails between Fong and Lam designed to cover up the wrongdoing and prevent detection.

End

Notes:

1. Fong was licensed under the Securities and Futures Ordinance to carry on Type 4 (advising on securities) and Type 9 (asset management) regulated activities and was accredited to HSZ from 2004 to 2006. His licence was revoked in March 2006 and he does not currently hold an SFC licence.
2. Please see SFC press releases dated 7 July 2009 and 20 July 2009.

SFC prosecution relating to offshore / onshore activities

On June 2, the SFC published a release stating that it had disciplined a trio for unlicensed leveraged forex trading. The SFC website stated: The Securities and Futures Commission (SFC) has taken disciplinary actions against three individuals of Hantec Group for their involvement in an unlicensed leveraged foreign exchange trading operation following a determination of the Securities and Futures Appeals Tribunal (SFAT) (Note 1). The SFC has: revoked the licence of Ms Ng Chiu Mui and prohibited her from re-entering the industry for 10 years; suspended the licence of Mr Law Kai Yee for two years and three months (Note 3); and prohibited Ms Tang Yuen Ting from re-entering the industry for nine months and fined her $1,455,496

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