18 April 2012
Court of Appeal
CA
Civil Appeal No 256 of 2010
CACV 256/2010
Citations:|[2012] 2 HKLRD 786 English Judgment[2012] HKEC 535 English Judgment|
Presiding Judges: |Cheung, Yuen and Chu JJA|
Phrases: |Banking and finance - insider dealing - fund manager found culpable by dealing in shares of company after equity salesman gave him information about proposed placement of company's shares - whether s.270(1)(e) elements that equity salesman "connected person", fund manager's knowledge that equity salesman was "connected person", and "relevant information" established - objective test for "connected person" - Securities and Futures Ordinance (Cap.571) s.270(1)(e) |
Facts: *786 C, a listed company, wished to raise money by a top-up placement of its shares (the Placement). SC, a securities company, was eventually responsible for this and the placement was announced on 26 January 2004. Y was the Equity Salesman in the Sales Department, a public area, within SC. While SC had been negotiating with C, the Equity Capital and Derivatives Market Department (ECDMD) tasked Y to sound out potential investors for the Placement. The SC had a "Chinese Wall Policy" (the Wall) prohibiting the flow of inside information from the insider area of the firm (such as the ECDMD) to public areas (such as the Sales Department where Y worked), unless there was a valid business purpose for such communication, in which case the Compliance*787 Department had to be informed and prior approval obtained from both sides for "crossing the Wall". It also issued a protocol (the Protocol) for an equity salesman being brought over the Wall when he was tasked with market sounding, which required him to inform the recipient that the information in question was confidential and the recipient must not use it. X was the Director of Asian Equities
