Hong Kong's Securities and Futures Commission has appealed against the acquittal of fund manager Liang Jiang on charges of false trading, it announced on its website.

The appeal was actually lodged shortly before Christmas on December 22. It comes after magistrate Henry Mierczak acquitted Liang on December 8 on all 13 charges of false trading under section 295 of the Securities and Futures Ordinance.

The Eastern Magistracy had found Liang not guilty of false trading that was alleged to have taken place during the global financial crisis in 2008.

Liang had faced 13 charges that he intended that, or was reckless as to whether, his trading had the effect of creating a false or misleading appearance with respect to the market for, or the price of dealings in, securities, contrary to section 295 of the ordinance.

The court heard that on the last trading days of each month between June and December 2008, Liang placed orders for Foundation China Opportunity Fund and his wholly owned company, Bridge Investment Advisors, to purchase shares in Shun Ho Resources Holdings and Shun Ho Technology Holdings.

The SFC had alleged that these share acquisitions intentionally raised the closing prices of SHR and SHT on those days and that this "pumped up" the month-end net asset values of the fund during that six-month period.

In deciding to acquit, the magistrate said that although Liang's actions were suspicious, he could not be satisfied that each element of the offence had been made out beyond a reasonable doubt.

He said that Liang could have been carrying out portfolio rebalancing for the fund during the global crisis to maintain a holding of 30% of SHR and SHT in the fund, as Liang had claimed.

The magistrate ordered the SFC to pay Liang's costs. After the verdict was handed down, the SFC asked for written reasons and studied them before lodging its appeal.

A spokesman for the SFC was unable to provide further information on the case to AsianInvestor.