A former BNP Paribas Peregrine Capital banker and his girlfriend yesterday became the first people to be jailed in Hong Kong for insider trading, raising the stakes in the fight against white-collar crime.
Ma Hon-yeung, a former vice-president of BNP, was sentenced to 26 months’ imprisonment and fined HK$230,000 by Chief District Judge Patrick Li Hon-leung.
Ma’s girlfriend, Ivy Lo Yuk-wah, was jailed for 12 months and fined HK$210,000.
The fines are similar to the amount of profit they made from the illegal insider dealing in shares of Egana Jewellery & Pearls before its privatisation plan three years ago.
The court heard that Ma worked on the planned privatisation of Egana in 2006 and within days of knowing about the deal, tipped off his girlfriend and three family members about buying shares in the company before the deal was announced.
Ma and Lo are the first insider traders to be put behind bars after it became a criminal offence in 2003 under the Securities and Futures Ordinance. The offence attracts a maximum penalty of a 10-year imprisonment and a HK$10 million fine. Before 2003, insider traders only faced fines and a ban of several years from serving as a director.
“Insider dealing is serious dishonest conduct,” said Judge Li as he sentenced Ma and Lo. “To maintain our position as an international financial centre, it is important to eliminate insider dealing and to reinforce the transparency of the markets. A clear message must be sent to the public that the court takes a serious view on this offence.”
Judge Li also ordered the three relatives of Ma - his brother Sammy Ma Hon-kit, sister-in-law Cordelia Tso Kin-wah and nephew Ronald Ma Chun-ho - to serve 200 hours of community service and pay a combined fine of HK$457,000, in line with the profit they made.
Judge Li said the three faced a lesser penalty as “there is no evidence that they assisted [Ma Hon-yeung] in carrying out the plot” and were only “opportunist investors making use of the relevant information”.
All five have to pay the Securities Futures Commission’s investigation costs totalling HK$322,742.
SFC chief executive Martin Wheatley said the commission had other insider dealing investigations under way and criminally prosecuted five other cases already.
“The message should now be loud and clear that insider dealers will go to jail,” Mr. Wheatley said. “The jail sentences are a significant milestone signalling the community’s strongest condemnation of insider dealing.
“Insider dealing is a serious crime that will be punished severely, even for first-time offenders.”
He said the SFC would criminally prosecute alleged insider traders if there was sufficient evidence.
The SFC can also use the civil route by referring alleged insider dealing cases to the Market Misconduct Tribunal, which accepts a lesser standard of evidence but cannot sentence people to jail.
Christopher Cheung Wah-fung, the chairman of the Hong Kong Securities Professionals Association, said the SFC enforcement would help improve market integrity.
Sin Chung-kai, a former legislator, welcomed the tougher penalties but said the SFC should speed up its investigation.
“There are many alleged insider dealings in the market. The SFC should collect evidence in a quicker way. We have seen many insider dealing cases going on for a prolonged period,” Mr. Sin said.
1 comment:
HK sees first jail term for insider trade
Former banker, girlfriend sentenced
Enoch Yiu
2 April 2009
A former BNP Paribas Peregrine Capital banker and his girlfriend yesterday became the first people to be jailed in Hong Kong for insider trading, raising the stakes in the fight against white-collar crime.
Ma Hon-yeung, a former vice-president of BNP, was sentenced to 26 months’ imprisonment and fined HK$230,000 by Chief District Judge Patrick Li Hon-leung.
Ma’s girlfriend, Ivy Lo Yuk-wah, was jailed for 12 months and fined HK$210,000.
The fines are similar to the amount of profit they made from the illegal insider dealing in shares of Egana Jewellery & Pearls before its privatisation plan three years ago.
The court heard that Ma worked on the planned privatisation of Egana in 2006 and within days of knowing about the deal, tipped off his girlfriend and three family members about buying shares in the company before the deal was announced.
Ma and Lo are the first insider traders to be put behind bars after it became a criminal offence in 2003 under the Securities and Futures Ordinance. The offence attracts a maximum penalty of a 10-year imprisonment and a HK$10 million fine. Before 2003, insider traders only faced fines and a ban of several years from serving as a director.
“Insider dealing is serious dishonest conduct,” said Judge Li as he sentenced Ma and Lo. “To maintain our position as an international financial centre, it is important to eliminate insider dealing and to reinforce the transparency of the markets. A clear message must be sent to the public that the court takes a serious view on this offence.”
Judge Li also ordered the three relatives of Ma - his brother Sammy Ma Hon-kit, sister-in-law Cordelia Tso Kin-wah and nephew Ronald Ma Chun-ho - to serve 200 hours of community service and pay a combined fine of HK$457,000, in line with the profit they made.
Judge Li said the three faced a lesser penalty as “there is no evidence that they assisted [Ma Hon-yeung] in carrying out the plot” and were only “opportunist investors making use of the relevant information”.
All five have to pay the Securities Futures Commission’s investigation costs totalling HK$322,742.
SFC chief executive Martin Wheatley said the commission had other insider dealing investigations under way and criminally prosecuted five other cases already.
“The message should now be loud and clear that insider dealers will go to jail,” Mr. Wheatley said. “The jail sentences are a significant milestone signalling the community’s strongest condemnation of insider dealing.
“Insider dealing is a serious crime that will be punished severely, even for first-time offenders.”
He said the SFC would criminally prosecute alleged insider traders if there was sufficient evidence.
The SFC can also use the civil route by referring alleged insider dealing cases to the Market Misconduct Tribunal, which accepts a lesser standard of evidence but cannot sentence people to jail.
Christopher Cheung Wah-fung, the chairman of the Hong Kong Securities Professionals Association, said the SFC enforcement would help improve market integrity.
Sin Chung-kai, a former legislator, welcomed the tougher penalties but said the SFC should speed up its investigation.
“There are many alleged insider dealings in the market. The SFC should collect evidence in a quicker way. We have seen many insider dealing cases going on for a prolonged period,” Mr. Sin said.
Post a Comment