Hong Kong court upholds SFC action, paving the way for cross-border securities investigations
The Court of First Instance reject mainland man Tang Hanbo’s application for a judicial review to revoke and invalidate a search conducted on his residence
A Hong Kong court has upheld the Securities and Futures Commission’s action in helping its Chinese counterpart gather evidence in the city to prosecute the violation of the mainland’s securities laws, in a landmark case that could pave the way for more cross-border investigations by regulators.
In a Friday decision released online, Justice Anthony Chan KIin-keung of the Court of First Instance rejected Tang Hanbo’s judicial review application to strike out a July 2016 search warrant used to gather evidence that led to his prosecution and penalty.
Tang, a Chinese passport holder living in Hong Kong, was fined 1.2 billion yuan (US$180 million) last year by the China Securities Regulatory Commission (CSRC) for breaching the mainland’s laws while trading Shanghai-listed stocks.
He filed a legal challenge to declare the search warrant used by Hong Kong’s Securities and Futures Commission (SFC) unlawful, because the SFC had initially stated that the search was for possible breaches of the city’s regulations, when in fact they were used to gather evidence for mainland law enforcement.
Tang’s application would be the first legal challenge against cross-border enforcement collaborations since the 2014 start of the Hong Kong-Shanghai Stock Connect, where investors in both cities were able to trade in each other’s stocks.