Hong Kong’s Court of Appeal upheld insider-dealing convictions against former Morgan Stanley managing director Du Jun while reducing his fine and prison term, according to the city’s Securities and Futures Commission.
The appeal court lowered Du’s fine to HK$1.7 million ($219,000) from HK$23.3 million, and his jail term to six years from seven, the SFC said in a statement on its website yesterday. His lawyer argued before the appeal court in April that Du’s sentence was too heavy in comparison with those given to professionals convicted of similar crimes.
Du had been serving the longest jail sentence for the offense since the former British colony criminalized insider trading in 2003. District Court Judge Andrew Chan in 2009 found Du guilty of nine counts of the offense and one count of advising his wife to trade Hong Kong-listed Citic Resources Holdings Ltd., a Chinese oil and coal producer, in 2007.
Du’s offenses occurred while he was a part of a team of Morgan Stanley bankers advising Citic Resources on acquiring oil-field assets in China, the commission said.
The fine was reduced by the appeal court to take into account civil proceedings by the SFC against Du that aim to recoup losses incurred by his trading counterparties, the commission said yesterday.
Du worked for Morgan Stanley in Hong Kong from 2001 until May 2007, when he was fired. He returned to Hong Kong from Beijing in 2008 after HK$46.5 million of his assets in the city were frozen by the SFC.
He was arrested at the airport on his return. Du had borrowed HK$50 million in margin financing from Morgan Stanley for his transactions, more than double his 2006 basic salary and bonus of HK$19 million, prosecutors said.
The case was Hong Kong SAR v. Du Jun, CACC334/2009 in the Hong Kong Court of Appeal.