SFC scores victory over Tiger Asia in landmark ruling

The Court of Final Appeal made a landmark ruling yesterday, upholding the Hong Kong regulator's right to seek compensation from United States fund house Tiger Asia Management over its insider dealings in the city.

In a US$60 million settlement deal with the Securities and Exchange Commission in the US in December, Tiger Asia admitted making the insider trades. But it challenged Hong Kong's Securities and Futures Commission's right to pursue it for the offence even though the trades were carried out in the city.

The SFC had sought claims from the firm and banned its three senior executives - founder Bill Hwang Sung-kook, Raymond Park and William Tomita - from trading in Hong Kong.

The firm and the executives were charged for insider trading and market manipulation in December 2008 and January 2009 by short selling shares of China Construction Bank and Bank of China ahead of the placement announcements, pocketing a profit of HK$38.5 million.

The New York-based hedge fund initially won a Court of First Instance ruling in June 2011 that the SFC must first seek a criminal prosecution or civil inquiry for the insider dealing charges before it can sue to recover investors' losses.

That decision was overturned last year, with an appeals judge saying the regulator could independently seek civil remedies. Tiger Asia then took the case to the final court.