Hong Kong's Court of First Instance has ordered Tsoi Bun, a futures trader and former licensed intermediary, to pay HK$13.7 million ($1.8 million) to around 500 investors due to price manipulation of index futures contracts.
Tsoi was convicted of five offences of price rigging on January 30, 2012 following a retrial, and admitted yesterday to 49 further contraventions in proceedings brought by the territory's Securities and Futures Commission.
The SFC alleged and Tsoi admitted that on 29 days between February 14, 2007 and July 31, 2009, he bought futures contracts at lower final calculated opening prices (COPs) and sold futures at a higher final COP than would have otherwise been determined as a result of artificial trades arranged by him.
Under yesterday’s orders, Tsoi must restore around 500 local and global investors to the position they were in before transacting with him by paying a total of HK$13,688,950.
The restoration amount is the difference between the COPs of the index futures before Tsoi’s artificial orders are taken into account and of the COPs created as a result of his artificial orders at which the affected investors transacted with him.
The court appointed Baker Tilly Hong Kong Restructuring and Recovery to administer the restoration amount, which Tsoi must pay in court on or before January 28.
The SFC had prosecuted Tsoi for price rigging in 2009. He was acquitted by the Eastern Magistracy, but a retrial in 2011 found him guilty of five offences. He was the first person to be prosecuted criminally by the SFC for market manipulation in Hong Kong’s futures market.
In a separate case, the court order for Du Jun, a former managing director of Morgan Stanley Asia, to pay HK$23.9 million to 297 investors as a result of insider dealing in shares of Citic Resources Holdings, became absolute on Monday after no application to vary the order was made.