SFC withdraws Restriction Notice issued to a broker in connection with client’s suspected insider dealing
The Securities and Futures Commission (SFC) has withdrawn the Restriction Notice issued to Kingsway Financial Services Group Limited (KFS) in connection with a client account that holds proceeds of suspected insider dealing in the shares of TeleEye Holdings Limited (TeleEye) (Notes 1 & 2).
The withdrawal of the Restriction Notice came after the SFC obtained court orders to prevent dissipation of assets in relation to an investigation into suspected insider dealing.
The Restriction Notice, which was issued in May 2016, prohibited KFS from processing instructions from Ms Wei Juan or anyone authorized to operate Wei’s account with respect to cash and shares held in the account without the SFC’s consent.
Wei, together with her associates Mr Huang Yi and Ms Yik Fong Fong, are suspected of insider dealing in the shares of TeleEye.
On 27 January 2017, the SFC obtained an order by consent from the Court of First Instance that Wei and Huang jointly pay into the court $12,949,875, which is equivalent to the suspected insider dealing profits made by the three of them in the alleged insider dealing activities.
The withdrawal of the Restriction Notice by the SFC will enable Wei to pay the money into court under the order which, together with the interim freezing order against Yik, prevent the trio from frustrating any eventual disgorgement, restitutionary or financial penalty orders if they are found liable for insider dealing (Note 3).
KFS is not a subject of the SFC’s investigation and the Restriction Notice did not affect its operations or other clients.
- The Restriction Notice was issued under sections 204 and 205 of the Securities and Futures Ordinance (SFO). For more details, please see the SFC’s press release dated 3 June 2016.
- KFS is a corporation licensed under the SFO.
- For more details, please see the SFC’s press release dated 3 February 2017.