Four Hong Kong Stock Manipulators Sentenced to Prison

"Four Hong Kong Stock Manipulators Sentenced to Prison | AboutHK.Com - More Information About HK"

Bloomberg A Hong Kong court sentenced four people to as long as 30 months in prison for manipulating the market in shares of Asia Standard Hotel Group Ltd. in 2005. Chan Chin Yuen, a garment factory owner, was sentenced to 30 months; his brother Chan Chin Tat, sister-in-law Elaine Au Yeung Man Chun and Chui Siu Fung all were handed 26 month sentences by Deputy Judge Johnny Chan today. He also ordered them to pay the prosecution’s costs of HK$288,400 ($37,213) each. The four were convicted Nov. 13 of trading shares among themselves to mislead investors about the depth and liquidity of Asia Standard Hotel stock. The case is the first market manipulation offense Hong Kong’s Department of Justice has brought to trial under the Chinese city’s Securities and Futures Ordinance, which carries a maximum penalty of HK$10 million and 10 years in prison. Hong Kong has also cracked down on insider trading this year, securing the first jail sentences for the offense. Today’s sentence “sends the clearest possible deterrent message” to those who think they can get away with defrauding the market, Securities and Futures Commission Executive Director of Enforcement Mark Steward said. “They will be caught and they will go to jail,” he said. Insider Trading Former Morgan Stanley managing director Du Jun was sentenced to seven years prison and fined HK$23.3 million in September for insider trading, which also now carries a maximum prison sentence of 10 years and fines of up to HK$10 million. Before 2003, insider-trading charges were heard as civil cases at the Insider Dealing Tribunal, an agency with authority to impose fines. The SFC this year also successfully blocked a HK$15.93 billion buyout offer of PCCW Ltd., Hong Kong’s biggest phone operator, by its billionaire Chairman Richard Li on the grounds that a shareholders’ ballot that approved the transaction had been manipulated. This “is just the start,” said Paul Li, a financial markets partner at law firm Simmons & Simmons. He expects more criminal prosecutions for other offenses including false trading and price rigging. Trading of Asia Standard Hotel shares among the four sentenced today constituted 50 percent of turnover amounting to about HK$190 million between Aug. 1 and Sept. 5, 2005, the SFC said. Asia Standard Hotel operates three hotels in Hong Kong and one in Vancouver according to its annual report. Chan Chin Tat’s lawyer Gary Plowman couldn’t say after the sentencing whether there will be an appeal. To contact the reporter on this story: Debra Mao in Hong Kong at dmao5@bloomberg.net This e-mail address is being protected from spambots. You need JavaScript enabled to view it