The Market Misconduct Tribunal (MMT) has ordered Mr Jonathan Dominic Iu Wai Ching, a former responsible officer of Tarascon Capital Management (Hong Kong) Limited, to disgorge illicit profit of over $5.6 million from false trading and disqualified him for four years following legal proceedings brought by the Securities and Futures Commission (SFC).
On 22 trading days between August and September 2014, Iu placed contemporaneous orders in the shares of Sinopharm Tech Holdings Limited and Quantum Thinking Limited through the brokerage accounts of the hedge fund managed by Tarascon and of his mother, leading to opposing orders to be executed against each other.
These matched trades, which had the effect of creating a false or misleading appearance of active trading, or with respect to the price for dealings, in the listed shares, resulted in gains of $5.6 million in his mother’s brokerage account at the expense of the hedge fund.
At the material time, Iu, who was responsible for managing and making investment decision for the hedge fund, was also a director, the chief investment officer, and a substantial shareholder of Tarascon.
The MMT made the following orders against Iu:
- a disqualification order prohibiting him from being a director or involved in the management of any listed or unlisted corporation in Hong Kong for four years, effective from 28 June 2024;
- he is banned from dealing in securities, futures contracts, leveraged foreign exchange contracts or collective investment schemes in Hong Kong for four years, effective from 28 June 2024;
- he is not to engage in any conduct which constitutes market misconduct;
- he is to pay to the Government the sum of $5,617,540 being the amount of profit gained by Iu as a result of his market misconduct; and
- payment of the SFC’s investigation and legal costs, as well as the costs of the MMT proceedings.
