Insider Trading

SFC issues order to suspend Justin Ho

PUBLISHED : Thursday, 03 January, 2008, 12:00am
UPDATED : Thursday, 03 January, 2008, 12:00am

Justin Ho King-man, the son of Macau Chief Executive Edmund Ho Hau-wah and a former broker at JP Morgan Broking, was banned by the Securities and Futures Commission from the industry for four months for breaching the 'Chinese Wall' rule.

The SFC said the infraction occurred in March 2006, when Mr Ho, 26, then working in the equity sales department of JP Morgan, disclosed information about a share placement to his colleagues without authorisation from his supervisor, while continuing to recommend the listed company to clients.

The watchdog did not name the company but a source familiar with the situation said Mr Ho was handling a placement for mid-sized property developer Kowloon Development, a Macau landlord.

The 'Chinese Wall' restricts industry participants from exchanging information with colleagues or other departments about forthcoming or continuing deals to forestall the use of insider information.

Insider trading is illegal under Hong Kong law.

Kowloon Development's HK$1.16 billion placement took place in September 2006 with Cazenove Asia as bookrunner.

The SFC said Mr Ho did not regain his accreditation after leaving JP Morgan in May 2006, so the disciplinary action meant he would not be able to apply for another licence before the end of April this year.

In making the decision, the SFC had considered that Mr Ho did not act dishonestly or obtain any financial benefit from his conduct, as well as his otherwise clear disciplinary record and his frank admissions.

According to the SFC, Mr Ho 'failed to act with due care and diligence, in the best interests of his clients and the integrity of the market'.

'Although there was no trading based on this information, if there had been, it would have been illegal insider dealing, a much more serious contravention,' said SFC executive director of enforcement Mark Steward.