- SFC said Shah can't re-enter industry until March 2017
- Shah failed to disclose some of his personal trading accounts
Hong Kong’s securities regulator issued a one-year ban on Raaj Shah, who co-founded hedge-fund firm Matchpoint Investment Management Asia in 2009, for failing to disclose all his personal trading accounts in line with the firm’s policy.
Shah is banned from re-entering the industry until March 9, 2017, the Securities and Futures Commission said in a statement posted on its website late Thursday. An investigation by the regulator found he had concealed two of his three personal accounts between January 2009 and May 2014, and failed to obtain prior approval for securities trading.
Shah was one of the people who compiled Matchpoint internal policies, which required all employees and directors to disclose personal accounts with outside brokers and to seek pre-clearance for securities trading, the regulator said. Shah had only revealed to the firm a personal account with HSBC Holdings Plc’s private bank and sought trading authorization for that account, it added.
An investigation by the SFC found he also had accounts with Interactive Brokers LLC and Goldman Sachs Group Inc. Between January 2009 and March 2013, when his firm had outside investors, he traded in 20 stocks worth almost $13.2 million through the Interactive Brokers account. He traded the same stocks as the fund managed by his firm on the same day on at least six occasions from August 2011 to March 2012.
Shah concealed his personal trading activities in that account by evading questions and denying having other accounts when confronted by another responsible officer of the firm, who is not identified, according to the statement.
Shah was a partner of Och-Ziff Capital Management Group before founding his own firm. Matchpoint stopped managing client money in April 2013 after a strategic change, according to the SFC statement. He is not currently licensed by the SFC.
Shah didn’t immediately reply to an e-mail seeking comment on the allegations.
The SFC is stepping up scrutiny of personal trading irregularities in the hedge-fund industry. In mid-January, it banned Steven Barrett, a former trader at Black’s Link Capital and Myriad Asset Management, from the industry for 10 months after he was found to have concealed personal trades from the two employers by doing them through a friend.