Hong Kong's Securities and Futures Commission will appeal last week's decision not to freeze HK$38.5 million ($4.9 million) of the assets of New York-based hedge fund Tiger Asia Management and to allow it to continue trading in the territory.

The Court of First Instance struck out the SFC’s proceedings against the firm and three of its senior officers. This followed a decision on June 21 that the Court did not have jurisdiction to find contraventions of the insider dealing and market manipulation laws without a prior finding of the market misconduct tribunal or a criminal court.

The SFC began proceedings in August 2009 by applying for an injunction order to freeze up to HK$29.9 million of the assets of Tiger Asia and Bill Sung Kook Hwang, Raymond Park and William Tomita, including those located overseas.

The amount is equivalent to the notional profit made by Tiger Asia in alleged insider dealing and market manipulation activities in relation to dealings in the shares of China Construction Bank on January 6, 2009.

Then in April last year the SFC applied for a trading ban and a freezing of a further HK$8.6 million in assets, following similar allegations regarding placements of Bank of China shares by UBS and Royal Bank of Scotland on December 31, 2008 and January 13, 2009, respectively. It was the first time the SFC had applied to ban an entity from trading in the Hong Kong market.

The SFC argued that the court could still ban the Tiger Asia parties from dealing in Hong Kong-listed securities and their derivatives on the basis that they had breached the laws under section 213 of the Securities and Futures Ordinance or been involved in breaches or may do so in the future.

The SFC argued that the order on the trading ban did not require the court to find a contravention and that it should not strike out this part of the case.

The court considered that the SFC had not argued this in the earlier hearing and held that it did not have jurisdiction to make orders like this on the basis of prima facie evidence of a contravention.

Tiger Asia is one of many Tiger-branded funds that have been seeded by Julian Robertson. Hwang's Tiger Asia fund is among the first of these that Robertson started in 2000, after closing his own hugely successful hedge fund.