On 11 March 2009 Ma Hon Yeung, a former Vice President at BNP Paribas Peregrine Capital (now BNP Paribas Capital (Asia-Pacific)) (BNP), was found guilty and convicted, along with four others, on a total of 12 charges of insider dealing under section 291 of the Securities and Futures Ordinance, following an investigation by the SFC. On 1 April 2009, Mr Ma was sentenced to 26 months' imprisonment and ordered to pay a HK$230,000 fine.
The offence was committed whilst Mr Ma was working for BNP on the proposed privatisation of Egana Jewellery & Pearls Ltd (Egana). Aware of the fact he was privy to confidential price sensitive information, Mr Ma tipped off his co-defendants, who subsequently all bought shares in Egana, prior to the privatisation deal being announced in July 2006.
Prior to the Egana judgment, the criminal insider dealing offence had only been prosecuted through summary trial in the Hong Kong Magistrates Court, where the maximum penalty on summary conviction is up to 3 years imprisonment and a fine of HK$1 million. The Egana case clearly demonstrates that the SFC is willing to take extra steps in order to ensure that investors remain protected from dishonest insiders. Following Egana, the SFC has, on 27 March 2009, secured its second criminal conviction for insider dealing at trial on indictment. Mr Andy Lam Kong Hung, who was found to have made a 140 per cent profit through dealing in shares when privy to price sensitive information, has been remanded in custody pending sentencing on 20 April 2009.
In a parallel development, the UK's Financial Services Authority (FSA), as part of its tougher approach to tackling market abuse, on 27 March 2009, secured its first insider dealing criminal conviction following a prosecution brought by the FSA alone.