Convicted insider trader abandons final appeal
Banker serving six years gives up appeal against conviction, setting the stage for civil proceedings
Former Morgan Stanley managing director Du Jun, who was convicted in Hong Kong's biggest-ever insider trading case, has withdrawn his application to appeal against the decision.
But the commission said its civil proceedings against him under Section 213 of the Securities and Futures Ordinance will continue and can proceed without delay now that the criminal procedure has been completed.
Du's case was the first time the regulator had used this section to seek compensation for investors left out of pocket because of insider trading.
Du, then a managing director of Morgan Stanley, helped energy firm Citic Resources Holdings to issue bonds to buy a Kazakhstan oilfield and to hedge oil prices. He received e-mails that were sent out to select bankers in early 2007 to update them about these deals.
Between February and April 2007, Du bought Citic Resources shares nine times for a total of HK$87.1 million. When the oil deals were announced in May 2007, the firm's share price rose sharply, helping him rake in HK$23.3 million in profit.
He was arrested in 2008 when he came back to Hong Kong briefly after fleeing to the mainland.
Du had been seeking to appeal to the Court of Final Appeal after the Court of Appeal dismissed his appeal against the conviction in September.
However, his sentence of seven years was reduced to six after that appeal. The judges also substantially reduced the fine imposed on Du to HK$1.688 million from the HK$23.3 million slapped on him by the District Court in September 2009.
The Securities and Futures Commission said it "is seeking remedial orders against Du and as a result of the Court of Appeal's decision to reduce Du's fine in the criminal proceedings, the amount of HK$23,964,440 has been frozen pending further order in the SFC's civil proceedings".
The regulator would seek directions from the court concerning the remaining steps to be taken for a hearing of its civil claim against Du, it added.
