We asked our readers last week how Asia rates as a hub for insider trading. They scored the region highly, confidently asserting that the level of market manipulation puts Galleon hedge fund founder Raj Rajaratnam to shame.
Indeed, the Rajaratnam trial exposed insider trading of a number of Asian companies’ shares, including Taiwan Semiconductor Manufacturing Company and Singapore’s Flextronics. Certainly, insider trading scandals are common throughout the region.
At the end of February, regulators in Korea banned Deutsche Bank’s securities unit from trading derivatives on its own account for six months and fined it a record amount after a two-month investigation into charges of market manipulation and tardy reporting.
In India, the Securities and Exchange Board of India’s new chief regulator, UK Sinha, started work in February and is already busy with an insider-trading investigation into Reliance Industries in a case that has crept along at a snail’s pace since early 2008. That is fast, though, compared to its other investigation into Reliance, which dates back to 1994.
Hong Kong’s departing regulator, Martin Wheatley, has earned respect for the job he has done during the past six years, but there is still plenty of work for his successor to do. Huang Guangyu, the corrupt founder of Gome, appears to remain in charge of the company even from his jail cell.
No surprise, then, that 62% of our readers reckoned that insider trading is rampant in Asia, while 36% said it was no more or less a problem than in other markets. Just 2% of readers claimed insider trading was less prevalent here than elsewhere.
