Clifford Chance
SFC's broad power under section 213 confirmed
15 May 2013
In a landmark ruling on 30 April 2013, Hong Kong’s Court of Final Appeal (CFA) dismissed Tiger Asia Management LLC’s (Tiger Asia) appeal brought against the Hong Kong Securities & Futures Commission (SFC), in which Tiger Asia, an off-shore hedge fund based in New York, had sought to challenge the market regulator’s power to seek final freezing orders against some of Tiger Asia’s assets in the jurisdiction, without Tiger Asia or its executives ever having been convicted of an offence of insider dealing or market misconduct in Hong Kong for its alleged dealings in shares of the Bank of China Limited and the China Construction Bank Corporation Limited during 2009.
The CFA ruling, which upholds an earlier Court of Appeal ruling in the SFC’s favour, means that the SFC does have authority to seek remedial orders and injunctions against Tiger Asia without a criminal conviction or civil misconduct offence having been recorded, and to ban Tiger Asia from trading in Hong Kong, by invoking section 213 of the Securities & Futures Ordinance (SFO) – paving the way for the SFC to pursue compensatory claims on behalf of investors.
