Tiger Asia, Hwang Banned From Trading in Hong Kong for 4 YearsBonnie Cao
A Hong Kong tribunal banned Tiger Asia Management LLC and its founder Bill Hwang from trading securities in Hong Kong for four years after they admitted using inside information to trade Chinese bank stocks.
The Market Misconduct Tribunal determined that the New York-based hedge fund, Hwang and Head of Trading Raymond Park engaged in market misconduct in Hong Kong, the Securities and Futures Commission said in a statement yesterday.
Tiger Asia, since renamed Archegos Capital Management LLC and turned into a family office, agreed to pay HK$45.3 million ($5.8 million) to Hong Kong investors affected by the trades and $60.3 million in U.S. criminal and civil settlements after a legal battle that began in 2009. The case was the first directly brought to the Market Misconduct Tribunal by the SFC.
“This heralds a sterner approach in respect of protective measures provided under our law,” the Market Misconduct Tribunal said, as cited in the statement. “The protection of our market is a matter of such public importance, and cold shoulder orders so central to providing that protection, that market operators who, by their actions, show they cannot be trusted must from now on expect orders that exclude them from the market for more lengthy periods of time.”
Tiger Asia received advance information on UBS AG’s sale of 3.4 billion Hong Kong-listed shares of Bank of China Ltd. in December 2008 after agreeing not to trade on the knowledge, the SFC said in a July, 2013 filing with the tribunal.
Under Hwang’s direction, it shorted the stock ahead of the share placement, making a HK$9.1 million profit after transaction costs, the regulator said in May. Shorting involves selling borrowed shares and buying them back later as their prices fall for a profit.
Tiger Asia acted on similar information regarding a Bank of America Corp. sale of China Construction Bank Corp. shares in January 2009, according to the SFC.
As Park has suffered an incurable and seriously debilitating brain injury, tribunal decided to take no action against him, MMT said in yesterday’s statement.