(Corrects 14th paragraph to say Robertson helped three (not
two) former Hwang deputies by investing an undisclosed amount
(not $2.6 billion) in a fund they were starting. Also clarifies
that the three are not linked to case against Hwang and Tiger
* Bill Hwang, Tiger Asia Management set $44 mln settlement
* US prosecutors: Hwang traded illegally in 2 Chinese stocks
* Tiger Asia head trader Raymond Park also agrees to settle
By Emily Flitter and Svea Herbst-Bayliss
NEW YORK, Dec 12 In the latest chapter of a U.S.
crackdown on insider trading, Tiger Asia Management, an
Asia-focused hedge fund run by Sung Kook "Bill" Hwang, pleaded
guilty on Wednesday to wire fraud in connection with illegal
trading of two Chinese bank stocks, according to federal
prosecutors in New Jersey.
Hwang and the fund were separately charged with insider
trading in a civil suit by the U.S. Securities and Exchange
Commission, according to an SEC press release.
The SEC also charged Tiger Asia's head trader, Raymond Park,
with insider trading. Park and Hwang agreed to settle the SEC's
charges without admitting or denying them.
The defendants will pay a total of $44 million to settle the
criminal and civil charges, and Tiger Asia Management will be
placed on probation for a year.
Tiger Asia, which managed as much as $5 billion at its peak,
was a spin-off of fund guru Julian Robertson's Tiger Management,
one of the world's largest hedge funds in the late 1990s.
Robertson returned investor money in 2000 and focused on
investing his own earnings in funds managed by his protégées,
known on Wall Street as "Tiger Cubs."
Federal prosecutors and the SEC each charged Hwang with
profiting illegally from inside information about China
Construction Bank Corp and Bank of China
Ltd ahead of share placements by those
companies in 2008 and 2009.
According to the civil and criminal complaints, Park and
Hwang violated agreements with large investment banks that
prohibited Tiger Asia from trading in the stocks based on
information received while participating in the placements.
"Mr. Park is happy to put this matter behind him," said his
lawyer, Steven Glaser, a partner at Skadden, Arps, Slate Meagher
Hwang's lawyers did not immediately respond to requests for
The trading activity had already resulted in a freeze on
Tiger's assets and a ban from trading in Hong Kong. The fund,
which most recently managed $1.2 billion, announced in an August
letter it would return outside capital to investors because of a
"prolonged legal situation."
Hong Kong's Securities and Futures Commission alleged that
Tiger Asia was given advance notice by third parties of
forthcoming share placements by the two Chinese banks and
shorted shares in the stocks ahead of the placements being
Hwang, who was Robertson's top Asia manager, founded Tiger
Asia in 2001 using $16 million of Robertson's own money. But he
suffered a string of high-profile losses in recent years,
including hits from the bankruptcy of Lehman Brothers and the
failed merger attempt by Porsche and Volkswagen AG
Tiger Asia, based in New York, had no physical presence in
Hong Kong. Over the course of the fund's life, it returned an
average of 16 percent a year, but its returns were volatile
For his part, Robertson appeared to bear no hard feelings.
Early last month, he helped t hree of Hwang's former deputies
from Tiger Asia - none of them connected to the current case -
start another fund, Tiger Pacific Capital, investing an
The case against Hwang is the third insider trading inquiry
handled recently by federal prosecutors in New Jersey. That
state's U.S. Attorney's office is gaining ground traditionally
held by the U.S. Attorney in Manhattan, which handles the lion's
share of insider trading prosecutions. New Jersey's prosecutors
have recently become more aggressive in pursuing insider trading
The case against the fund was brought in New Jersey because
its back office operations are carried out there and Hwang is a
New Jersey resident, a spokesman for the New Jersey U.S.
The case is USA v. Tiger Asia Management, United States
District Court District of New Jersey.
(Reporting By Emily Flitter in New York and Svea Herbst-Bayliss
in Boston; Editing by Steve Orlofsky)