A couple of points. I'm very much not an expert, just going from the articles I've read.
1. The HK Securities and Futures commission is a very different entity to the Criminal courts in Hong Kong, and even further removed from the SSP in Mainland China with their famous 99.9% conviction rates.
2. There are concerns about the continued independence of regulatory bodies in HK, but those are more to do with Chinese courts being able to apply judgements in HK against their own citizens and arbitrarily seize assets. (
https://www.theguardian.com/world/2...rcial-disputes-under-new-law?ref=upstract.com)
3. I may be way off, but would penalties handed out by the HK SFC be roughly in line with the equivalent US regulatory commission? It might be comparing Apples and Tangerines to look at the Morgan Stanley punishment 2 years earlier, but it certainly seems more than a slap on the wrist, if he's found guilty.
FT Article Quotes:
Hong Kong’s financial regulator has launched criminal proceedings in an insider dealing case against hedge fund Segantii Capital Management and its founder and director, Blackpool Football Club owner Simon Sadler. The Chinese territory’s Securities and Futures Commission said on Thursday it had also started proceedings against former Segantii trader Daniel LaRocca. According to an SFC statement, the charges relate to dealing in the shares of an unnamed company listed on the Hong Kong Stock Exchange before a block trade in June 2017.
“This is a big deal. It’s rare to see criminal charges of this magnitude brought against a prominent fund manager,” said Kher Sheng Lee, Asia-Pacific co-head of the Alternative Investment Management Association, a hedge fund industry body.
Sadler and LaRocca did not make any pleas at a court hearing on Thursday, the SFC said. Sadler was released on cash bail of HK$1mn ($128,000) and LaRocca on bail of HK$500,000, it said, adding that the case had been adjourned to June 12....
...Segantii was known to be among the most prolific buyers of blocks, and Sadler built strong relationships with big banks as a go-to liquidity provider. However, block trading came under intense scrutiny...in March 2021 when banks, including Goldman Sachs, Credit Suisse, Morgan Stanley and Nomura, were left with billions of dollars worth of stock in a handful of companies to offload.
In January, Morgan Stanley agreed to pay $249mn to settle federal investigations into misconduct at its block trading business and one of its former top investment bankers admitted to leaking confidential information to clients. The US Securities and Exchange Commission issued the former head of Morgan Stanley’s US equity syndicate desk, Pawan Passi, with a $250,000 civil penalty and barred him from working in the industry.
In 2022, the Financial Times revealed that Bank of America and Citigroup had suspended equity trading with Segantii due to concerns about the hedge fund’s bets on the sale of blocks of shares. The banks’ moves were a rare roadblock for 54-year-old Sadler, whose ambitious risk-taking has reaped large rewards, both at his hedge fund and elsewhere.
because the banks were only hinting, not explicitly pointing to a company.
