In the recent case of HKSAR v Pang Hung Fai (FACC 8/2013), the Court of Final Appeal (the CFA) offered, for the first time, authoritative guidance on the mental element of “having reasonable grounds to believe” under section 25(1) of the Organized and Serious Crimes Ordinance (Cap 455) (the OSCO).
Section 25(1) makes it an offence for anyone to deal with any property while “knowing or having reasonable grounds to believe” that such property in whole or in part directly or indirectly represents any person’s proceeds of an indictable offence. The CFA’s judgment in effect overturns previous Court of Appeal (the CA) jurisprudence and offered much-welcomed clarity on the subject.
After over two and a half years since US-based hedge fund manager Tiger Asia Management LLC and its three officers (collectively “Tiger Asia”) sought to strike out the application by the Securities and Futures Commission (“SFC”) for orders under section 213 of the Securities and Futures Ordinance (“SFO”) in the SFC’s market misconduct investigation of Tiger Asia, the Court of Final Appeal (“CFA”) has finally laid to rest Tiger Asia’s challenge of the court’s powers to make such orders by dismissing its appeal against an earlier Court of Appeal (“CA”) ruling. Mark Johnson, Gavin Lewis and Wings Turkington provide an analysis of the decision. Continue reading
The Securities and Futures Commission (SFC)’s two-month consultation on the amendments to the Code of Conduct to facilitate the establishment of the Financial Dispute Resolution Centre Ltd (FDRC) and to enhance the regulatory framework (Consultation) ended in January 2012. The SFC recently published its consultation conclusions (Consultation Conclusions).
The Consultation Conclusions confirm, amongst other things, that the scope of the existing self-reporting requirement under paragraph 12.5 of the Code of Conduct will be extended to include any suspected material breach, infringement or non-compliance with the civil (Part XIII) or criminal (Part XIV) market misconduct provisions of the Securities and Futures Ordinance (SFO) by clients of licensed and registered persons. Some other miscellaneous amendments include a ban on the use of mobile phones for accepting client orders in certain circumstances, the extension of the telephone recording retention period from at least three to six months, a requirement not to accept orders placed by a third party for a client’s account unless that third party is authorised by the client in writing, and a requirement not to prohibit employees from performing expert witness services for the SFC or the Hong Kong Monetary Authority without reasonable excuse.
The amendments to the Code of Conduct in relation to the establishment of the FDRC will come into effect on 19 June 2012 and other miscellaneous amendments, including those in relation to the self-reporting requirement, will come into effect on 1 December 2012. Mark Johnson, Gavin Lewis and Tim Mak provide some observations below. Continue reading
The Securities and Futures Commission (“SFC”) secured a victory in the Court of Appeal last week in its ongoing battle against the New York-based hedge fund Tiger Asia Management LLC and several of its officers.
In its judgment last week, the Court of Appeal upheld the SFC’s appeal in which the regulator successfully argued for its right to seek, for investor protection purposes, remedies against perpetrators of market misconduct, in addition to and independent of any findings of a criminal court or the Market Misconduct Tribunal (“MMT”). This latest decision has clarified an important question which was previously left unanswered, and, subject to the outcome of any appeal to the Court of Final Appeal lodged by the Tiger Asia parties, strengthens the SFC’s ability to combat cross-border market misconduct. Mark Johnson, Gavin Lewis and Tim Mak analyse the decision below. Continue reading