HONG KONG (Reuters) - Former Morgan Stanley managing director Du Jun was sentenced to a maximum seven years in jail on Friday after a district court found him guilty of insider trading in the city’s highest-profile case of its kind.
A judiciary spokeswoman said Du was also fined HK$23.3 million ($3.01 million).
The stiff jail term underscores the determination of the Securities and Futures Commission (SFC), the financial industry watchdog, to crack down on financial crime and follows a series of convictions secured by the Commission.
“This sentencing sends the strongest possible message to anyone tempted to commit an insider dealing offence in the future,” Mark Steward, the Commission’s Executive Director of enforcement told reporters outside the court.
Du was charged with acquiring shares worth HK$86 million in CITIC Resources between February and April 2007 while he had material and price-sensitive information not known to the market on the firm’s plans to acquire oil field assets in China.
He was also charged with advising his wife to deal in CITIC Resources shares in that period.
The verdict comes 14 months after Du was arrested at the Hong Kong airport.
The SFC, long criticized for being too soft on Hong Kong’s clubby financial circles, has won a total of 10 convictions for insider trading since March this year. These include those of a former BNP Paribas Peregrine Capital investment banker and a former director of investment banking at CLSA Equity Capital Markets.
Reporting by Donny Kwok and James Pomfret; editing by Tomasz Janowski