The SFC has commenced proceedings in the Market Misconduct Tribunal (MMT) against Mr Andrew Left (Mr Left) of Citron Research, relating to alleged market misconduct involving the publication of a research report on Evergrande Real Estate Group Limited (Evergrande) in June 2012.

The SFC alleged that on 21 June 2012, Mr Left published a report on Citron Research’s website that contained false and misleading information about Evergrande. The report stated, amongst other things, that Evergrande was insolvent and had consistently presented fraudulent information to the investing public. The share price of Evergrande fell sharply on the same day following the publication of the report.

The SFC also alleged that shortly before publishing the report, Mr Left had short sold 4.1 million shares of Evergrande which he subsequently bought back, making a notional profit of over HK$2.8 million. Mr Left made a total realised profit of approximately HK$1.7 million.

A copy of the SFC’s notice commencing the MMT proceedings can be found via the link below:

http://www.mmt.gov.hk/eng/rulings/Evergrande_22122014_e.pdf