A former fund manager at Boston-based Fidelity Management & Research, who used inside information to trade in shares of Chaoda Modern Agriculture three years ago, has been banned from trading in the Hong Kong bourse for two years.
George Stairs was ordered not to buy or sell any securities, the Market Misconduct Tribunal said yesterday in a report on its investigation. Stairs was also ordered to pay almost HK$860,000 to the government and the Securities and Futures Commission toward the cost of proceedings.
Stairs sold 374,000 shares in Chaoda, a Hong Kong-listed farming firm, on behalf of the fund that he managed at HK$5.30 apiece on June 16, 2009, one day after he was notified of the company's plan to launch a share placement at around HK$5 per share.
Chaoda management, including chairman Kwok Ho and chief financial officer Chan Chi-po, told Stairs about the share placement in a teleconference and the plan was made public the next day, the report said. Stairs joined the share placement and bought 630,000 shares in Chaoda at HK$4.60.
The report said Stairs was able to avoid a loss of HK$280,554 by selling the shares ahead of the share placement.
The tribunal decided not to fine Stairs since he had had no personal interest in the fund from which he sold the Chaoda shares.