Ex-Slaughters and Linklaters lawyers face trial in HK for insider dealing
Two Hong Kong lawyers who previously worked for magic circle firms are facing trial in the SAR after the High Court refused to strike out proceedings against them for their alleged involvement in insider dealing offences. Young Bik Fung, an ex-Slaughter and May lawyer, and her boyfriend Lee Kwok Wa, previously with Linklaters, have been the subject of a lawsuit filed by the Securities and Futures Commission (SFC) in 2010 which claims they violated the Securities and Futures Ordinance (SFO) after using confidential information to trade shares.
October 29, 2013 at 03:13 AM
3 minute read
Two Hong Kong lawyers who previously worked for magic circle firms are facing trial in the SAR after the High Court refused to strike out proceedings against them for their alleged involvement in insider dealing offences.
Young Bik Fung, an ex-Slaughter and May lawyer, and her boyfriend Lee Kwok Wa, previously with Linklaters, have been the subject of a lawsuit filed by the Securities and Futures Commission (SFC) in 2010 which claims they violated the Securities and Futures Ordinance (SFO) after using confidential information to trade shares.
The defendants, who made a total profit of HK$2.9m from two transactions, denied the allegations and argued that the Court of First Instance, part of Hong Kong's High Court, had no jurisdiction under section 213 of the SFO to seek court orders against them and that the SFC had no reasonable cause of action.
But High Court Judge Anthony Chan found that the arguments were misconceived and dismissed the application to strike out the proceedings.
In the first case, Young, Lee, and Lee's two sisters bought shares in the Taiwan-listed Hsinchu International Bank shortly before a proposed takeover by Standard Chartered Bank was announced.
The SFC claims that Young, who was working on secondment within Standard Chartered at the time on the proposed takeover, relied on fraudulent or deceptive schemes for the transaction.
It is unable to allege however that the Hsinchu trades constituted insider dealing, since the rules in Hong Kong's SFO do not apply to shares traded on the Taiwan Stock Exchange.
The second deal involved the proposed privatization of Asia Satellite Telecommunications (Asia Satellite) by CITIC Group and General Electric Capital Corp. On the morning before trading was suspended for the deal, Young and Lee's two sisters began buying shares in the company.
The SFC alleges that Lee, who was working for Linklaters – the firm engaged to advise CITIC Group on the transaction – worked within the department that was on the deal.
It accuses him and Young of insider dealing, and claims that their trading accounted for 73% of the total trading on that day.
Linklaters declined to comment on the case, except to say that Lee left the firm in 2007, and the firm had nothing to say as regards his personal legal proceedings. Slaughter and May also did not provide a comment.
Related: Ex-K&L Gates Hong Kong partner sentenced to 12 years for fraud
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