Hong Kong's Securities and Futures Commission (SFC) has commenced criminal proceedings against Hong Kong-based hedge fund Segantii Capital Management, its director and chief investment officer Simon Sadler, and former trader Daniel La Rocca, for insider dealing in the shares of a company listed on the Hong Kong Stock Exchange (HKEX) prior to a block trade in June 2017.
The name of the company was not identified by the SFC.
No plea was taken when the defendants appeared at the Eastern Magistrates’ Court on May 2, and the case was adjourned to June 12, 2024, the SFC said in a statement.
Sadler and La Rocca were released pending the next hearing on the following conditions: (i) cash bail of HK$1 million ($130,000) and HK$500,000 respectively; (ii) they shall inform the SFC 24 hours before leaving Hong Kong, and to provide the SFC with full itinerary with contact details; (iii) they shall reside at the home address provided to the SFC and inform the SFC 48 hours in advance of any change of address and/or contact details whilst abroad; and (iv) they shall not contact either directly or indirectly any prosecution witnesses.
The SFC said that no further comment will be made now that legal proceedings have commenced. If found guilty there could be fine of up to HK$10 million and a possible jail sentence of up to 10 years.
Sadler founded Segantii in 2007 and also owns Blackpool Football Club in the UK. Segantii has offices in Hong Kong, London, New York and Dubai, according to its website. As of the end of March 2024 it had $4.8 billion of assets under management and 151 employees globally.
Segantii is a hedge fund management firm licensed under Hong Kong's Securities and Futures Ordinance (SFO) to carry on Type 9 regulated activities. Section 291 of the SFO prohibits insider dealing of listed securities of a listed corporation or their derivatives.
A spokesperson for Segantii told FinanceAsia that it "intends to defend itself vigorously against the charge".
