The Market Misconduct Tribunal (MMT) has ordered Jonathan Dominic Iu Wai Ching, a former chief executive of Tarascon Capital Management (Hong Kong) Limited, to disgorge more than $5.6 million in illegal profits from false trading and banned him for four years after legal procedures. provided by the Securities and Futures Commission (SFC).
On 22 trading days between August and September 2014, Iu submitted concurrent orders to the shares of Sinopharm Tech Holdings Limited and Quantum Thinking Limited through the hedge fund brokerage accounts managed by Tarascon and his mother, resulting in counter orders being executed against each other.
These matched trades, which had the effect of creating a false or misleading appearance of active trades or price to trade, in the listed shares, resulted in $5.6 million in profits in his mother’s brokerage account at her expense hedging capital.
At the material time, Iu, who was responsible for managing and making investment decisions for the hedge fund, was also a director, chief investment officer and major shareholder of Tarascon.
The MMT made the following orders against Iu:
- a disqualification order prohibiting him from being a director or participating in the management of any listed or unlisted company in Hong Kong for four years, with effect from 28 June 2024;
- is prohibited from dealing in securities, futures contracts, foreign exchange leveraged contracts or collective investment schemes in Hong Kong for four years, effective from 28 June 2024;
- must not engage in any conduct that constitutes market misconduct;
- will pay the government the sum of $5,617,540 which is the amount of profit Iu made as a result of his misconduct in the market. and
- paying the SFC’s investigation and court costs, as well as the costs of the MMT proceedings.