HONG KONG, June 2 Hong Kong's high court said on
Thursday it will rule within two weeks whether the market
regulator is allowed to ban New York-based hedge fund Tiger Asia
from trading in the territory and freeze money it says are the
proceeds of insider dealing.
Tiger Asia is challenging the Securities and Futures
Commission's (SFC) proposed ban and asset freeze, saying the
regulator should stick to just pursuing a criminal prosecution.
The SFC says it has to use a two-fold strategy to tackle
market misconduct -- institute criminal proceedings but also
take remedial actions to ensure investor protection and claw
back the profits made from insider-dealing cases.
But given that Tiger Asia and all of its employees are based
outside of Hong Kong, the SFC has not been able to pursue a
criminal case against the individuals it alleges were involved.
In the first case of its kind, the market regulator sought
to prevent Julian Robertson-seeded Tiger Asia from dealing in
listed securities and derivatives last year.
The SFC alleged that Tiger Asia, its portfolio manager Bill
Hwang, and two other executives Raymond Park and William Tomita,
engaged in insider trading and market manipulation in the shares
of China Construction Bank Corp (CCB) and
Bank of China in 2008 and 2009.
SFC has accused Tiger Asia of insider trading in shares of
Bank of China in January 2009 after receiving confidential and
price-sensitive information regarding two share placements. This
was the second such charge levelled against the firm by the SFC.
The regulator has applied to freeze HK$8.6 million ($1.1
million) of Tiger Asia's assets, the amount of notional profit
made by the firm in one of the alleged insider-trading
transactions in Bank of China.
In August 2009, the SFC applied for a high court injunction
to freeze close to HK$30 million of Tiger Asia's assets,
equivalent to the profit made by the firm through alleged
insider trading in shares of China Construction Bank .
($1 = 7.780 Hong Kong Dollars)
(Reporting by Nishant Kumar and Helen Chan in HONG KONG and
Rachel Armstrong in SINGAPORE; Editing by Muralikumar