SFC looking at third way to settle cases

With the media reporting settlements worth billions of dollars for manipulating the London interbank lending rate and numerous convictions for rogue trading, market misconduct and insider dealing, the past year was undoubtedly a successful one for securities regulators around the globe.

Hong Kong was no exception, with the Securities and Futures Commission racking up a number of significant victories.

With the enforcement division of the commission undoubtedly feeling confident off the back of its successes, where can those working in the industry expect it to focus its attention on in the coming months?

As the regulator tasked with ensuring the markets operate fairly and that investors are protected, insider dealing and market misconduct will remain a core focus. There have been a number of prominent convictions in recent times, including the imprisonment of Li Jialin of VST Holdings for six months. This case was the first time that the SFC secured the conviction of a chairman of a listed company for market manipulation since the Securities and Futures Ordinance was enacted in 2003.

There is a clear trend of the SFC vigorously pursuing criminal charges in cases where it thinks the evidence is strong enough to achieve a conviction, regardless of whether the defendant is a day trader or a director of a listed company.

With its high success rate and the courts often handing down jail terms for market abuses, this trend can be expected to continue.