The Securities and Futures Commission (SFC) of Hong Kong has recently initiated criminal legal proceedings against Segantii Capital Management Limited (Segantii), its director and chief investment officer Simon Sadler, and former trader Daniel La Rocca, accusing them of insider trading ahead of a significant transaction in June 2017.
According to the investigation, the defendants are accused of insider trading in shares of a company listed on the Hong Kong Exchanges and Clearing Limited, violating section 291 of the Securities and Futures Ordinance. A significant transaction usually refers to a one-time large-scale purchase or sale of shares, whereas insider trading involves trading based on non-public information before it is disclosed to the public.
In the Eastern Magistrates' Courts hearing this morning, the defendants were not required to enter a plea, and the case has been adjourned to June 12, 2024, for further hearing. However, Sadler and La Rocca were granted bail, awaiting their next hearing, with bail set at HK$1,000,000 and HK$500,000, respectively. They must adhere to strict conditions, including notifying the SFC 24 hours before leaving Hong Kong and providing their itinerary and contact information, residing at an address specified by the SFC, notifying the SFC 48 hours in advance of any changes to their overseas address or contact information, and not contacting any prosecution witnesses directly or indirectly.
As the case is now under legal proceedings, the SFC stated that it would not comment further on the matter.
Segantii is a hedge fund management company holding a Type 9 regulated activity license, and its operations are regulated under the Securities and Futures Ordinance. Insider trading severely damages market fairness and transparency, and the SFC will continue to strengthen regulatory efforts to maintain market order and protect investor interests.
