Hong Kong has seen its first successful prosecution for insider dealing under the Securities and Futures Ordinance 2003. The case concerned a finance manager of a subsidiary of Sino Golf Holdings Ltd. In the course of her employment the manager became aware that a debtor of the subsidiary company had filed for Chapter 11 bankruptcy protection in the US. She sold her holding of 180,000 shares in Sino Golf before the market became aware of the debtor's financial difficulties and its impact on the subsidiary.The Securities and Futures Commission (SFC) argued that by selling her shares at this time she avoided a loss of HK$63,333. This argument was upheld by the the Eastern Magistracy. The Principal Magistrate sentenced the employee to six months' imprisonment (suspended for two years), fined her HK$200,000 and ordered her to pay $20,253 in costs to the SFC.
For further information see:
SFC press release | Insider dealing is defined in Section 270 of the Securities and Futures Ordinance 2003.
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