Tribunal's power to levy fines challenged
Former Easyknit Group chief executive Matthew Koon Wing-yee brought the first court challenge against the Securities and Futures Commission's Market Misconduct Tribunal, claiming it acts as a criminal court and should thus be barred from using compulsory evidence.
In the judicial review before the Court of First Instance, Mr Koon's lawyer argued the tribunal was designed as a civil court but it could require a market manipulator to pay the amount profited from a tainted deal to the government, making it look like a fine and therefore punitive.
'What's paid to the government cannot be restitution because the government did not suffer any loss,' argued barrister J.J.E. Swaine, acting for Mr Koon.
Details of the SFC investigation that sparked the challenge were not revealed in court yesterday.
The case follows one brought by Mr Koon and an associate in which the Court of Appeal ruled the practice by the Insider Dealing Tribunal - the Market Misconduct Tribunal's predecessor - of forcing people to give incriminating evidence against themselves was unconstitutional.
Central to that finding was that punishments available to the Insider Dealing Tribunal, in particular its ability to fine a wrongdoer three times his proceeds from a tainted deal, went beyond what a civil court should be allowed to impose.
The law governing the tribunal was changed four years ago with the passage of the Securities and Futures Ordinance, creating a specific criminal offence of insider dealing and the Market Misconduct Tribunal to hear civil cases arising after 2003.
Mr Koon's case had initially fallen under the Insider Dealing Tribunal's jurisdictions as the alleged infraction dates back to 2000, before the rules changed.