Regulators bare teeth as ex-Goldman Sachs adviser banned
Hong Kong's regulators showed their teeth yesterday as the Securities and Futures Commission took action on a former adviser of Goldman Sachs (Asia) while the stock exchange won a legal battle.
The SFC banned former Goldman adviser Ronnie Wong Wang from entering the investment industry for two years for unauthorised trades of a derivative product called accumulators.
The commission said she traded HK$13.8 million of accumulators in November 2007 for a client without her consent. A month later, Ms Wong showed the client an inaccurate spreadsheet overstating the earnings by US$1.72 million.
The SFC did not identify the client but a source confirmed that it was Modern Beauty Salon Holdings founder and former chairman Joyce Tsang Yue, who last year publicly said she had suffered HK$60 million in losses from Ms Wong's unauthorised trades.
Ms Wong admitted to the SFC that she conducted the transactions without proper authorisation.
'However, she [Wong] claimed it was a good investment and the client normally accepted her recommendations,' the SFC said.
Ms Tsang had signed a confirmation of the transactions in January last year but filed a complaint with the SFC two months later. She sued Goldman and sought compensation in May last year.
Ms Tsang said yesterday she believed the commission's action proved she had the grounds to seek claims against Goldman.
'I want Goldman to pay my money back,' she said.
A Goldman spokesman yesterday said 'we reported this matter to the SFC last year and co-operated fully with its subsequent investigation'. Regarding Ms Tsang's claims, the spokesman said: 'We will continue to defend strongly unsubstantiated claims and allegations made against Goldman Sachs.'
Separately, Hong Kong Exchanges and Clearing won a legal battle yesterday as the Court of Appeal ruled that the bourse has the right to decide whether a listed firm can resume trading from suspension.
The hearing presided over by Justices Anthony Rogers, Doreen Le Pichon and William Stone lasted only an hour before they overturned a High Court ruling last year that Sanyuan Group could re-apply for a resumption of trading after the exchange rejected its application.
Appeal court judges said the exchange had the right to exercise subjective professional judgment in determining whether a company's resumption of trading proposal was qualified.
Mr Justice Rogers said the exchange, as the regulator, had the right to enforce the listing rules.
A HKEx spokesman said the exchange welcomed the appeal court's decision.
The High Court ruling in June last year marked the first time a Hong Kong-listed company had successfully sued for the right to resume trading.
The court ordered the decision by the listing appeal committee quashed and remitted the case to a newly constituted listing appeal committee for reconsideration.
