HONG KONG â€" A court on Friday ordered Tiger Asia Management, the regional arm of the New York-based hedge fund Tiger Management, to repay nearly $6 million to more than 1,800 investors after the fund admitted to insider trading and share price manipulation.
Responding to charges brought by Hong Kong’s Securities and Futures Commission in 2009, the Justice Jonathan Russell Harris ordered Tiger Asia and two of its senior officers, Bill Hwang and Raymond Park, to pay 45.3 million Hong Kong dollars, or $5.8 million, as restitution to the investors who were on the other side of its illegal trades in the shares of Bank of China and China Construction Bank.
Tiger Asia, which last year began returning money to its investors amid pressure from insider trading investigations in Hong Kong and in the United States, admitted it had received advanced notice on separate occasions in late 2008 and early 2009 that the two Chinese banks were planning share placements. Tiger Asia acknowledged using this inside information to sell short the shares in the banks.
The restitution amount represents the difference between the actual price of the shares that were sold by Tiger Asia and the value those shares would have had if inside information on the share placements had been taken into account.
“Tiger Asia’s admissions of insider dealing and manipulation vindicate the S.F.C.’s allegations made at the outset of these proceedings,†Mark Steward, the executive director of enforcement at the securities regulator, said Friday in a statement. “Investors are unable to detect, or avoid transacting with, wrongdoers in the market and so they are highly vulnerable to this kind of misconduct.â€
It is the second time this month that the S.F.C. has won a court order forcing those guilty of insider trading to pay restitution to investors. On Dec. 12, a judge ordered a former managing director at Morgan Stanley in Hong Kong, who is serving a six-year jail term for insider trading, to pay civil compensation of about $3 million to nearly 300 investors.
