IT HAS long been considered a paradise for investors who have a juicy bit of inside knowledge. Insider trading was not even a criminal offence in Hong Kong until 2003. Earlier this year local tycoons banded together to block proposed changes to disclosure rules that, in effect, allow executives to front-run earnings announcements. So a striking change in regulatory approach has come as a shock to many.
Over the past year Hong Kong’s Securities and Futures Commission (SFC) has initiated ten prosecutions for insider trading, resulting in ten guilty verdicts, dozens of convictions and five jail sentences. This month the SFC claimed its biggest scalp yet with the conviction of Du Jun, a former Morgan Stanley banker, who was expected to receive a hefty jail term at his sentencing on September 18th.
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