Market Misconduct Tribunal gives Tiger Asia the "cold shoulder"

10 October 2014. Published by Jonathan Cary, Partner

Hong Kong's Market Misconduct Tribunal (the MMT) has banned Tiger Asia Management LLC (a hedge fund based in New York) and one of its principal officers from dealing in Hong Kong securities for four (of a maximum five) years.

This comes on the back of a finding that Tiger Asia and a number of its officers engaged in market misconduct.

This power has been exercised pursuant to section 257 of the Securities and Futures Ordinance (Cap. 571). Such a ban is colloquially known as "cold shoulder" order; an outcome that is not unexpected in this case.  The ban has also been accompanied by a so-called "cease and desist" order.


The background to the proceedings is set out in our previous blog in January 2014 (click here).

In short, the Securities and Futures Commission (the SFC) commenced the MMT proceedings in July 2013. In December, the SFC obtained orders from the High Court that Tiger Asia and two of its senior officers pay approximately HK$45 million by way of restoration to those counterparty investors said to have been affected by Tiger Asia's market misconduct. This followed admissions made by Tiger Asia in the SFC's civil proceedings, pursuant to section 213 of the Ordinance.

This is the first time the SFC has directly instituted proceedings in the MMT; previously, only the Financial Secretary of the Hong Kong government had done so.


The ban serves as a warning to those who trade in Hong Kong securities on the back of inside information (be they in Hong Kong or overseas).

In a customary press release dated 9 October 2014, the SFC Director of Enforcement comments that Tiger Asia and its senior officer were mistaken if they thought that their misconduct would be ignored by the SFC because Tiger Asia was located overseas.

The MMT's decision states that the ban in this case heralds a sterner approach to "protective measures" and that market miscreants should in future expect more lengthy bans from dealing in Hong Kong's markets.

A party dissatisfied with a finding or determination of the MMT may appeal to the Court of Appeal on a point of law or (with permission of the Court of Appeal) on a question of fact.  A party against whom a sanction (order) has been imposed pursuant section 257 of the Ordinance may also appeal to the Court of Appeal.  An aggrieved party may apply for a stay of an MMT order.

Given the background circumstances to this case, the prospects for a successful appeal can be described as slim.

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