Hedge fund manager to pay $44 million for short selling
18 December 2012 Washington D.C.
Image: Shutterstock
Sung Kook Hwang, a manager of two New York-based hedge funds, and his two firms have agreed to pay $44 million to settle US SEC charges over short selling.
Hwang, who is the founder and portfolio manager of Tiger Asia Management and Tiger Asia Partners, carried out two trading schemes with Chinese bank stocks.
The US SEC alleged that Hwang and his firms committed insider trading when they sold short three Chinese bank stocks based on confidential information that they received in private placement offerings.
Hwang and his firms made $16.7 million in illicit profits, according to the US SEC.
Robert Khuzami, director of the US SEC’s division of enforcement, said: “Hwang today learned the painful lesson that illegal offshore trading is not off-limits from US law enforcement, and tomorrow’s would-be securities law violators would be well-advised to heed this warning.”
Sanjay Wadhwa, associate director of the US SEC’s New York regional office and deputy chief of the enforcement division’s market abuse unit, added: “Hwang betrayed his duty of confidentiality by trading ahead of the private placements, and betrayed his fiduciary obligations when he defrauded his investors by collecting fees earned from his attempted manipulation scheme.”
Raymond YH Park was also charged for his role in both schemes as the head trader of the two hedge funds that were involved, Tiger Asia Fund and Tiger Asia Overseas Fund.
Park also agreed to settle the US SEC’s charges.
The US Attorney’s Office for the District of New Jersey has also announced criminal charges against Tiger Asia Management.
Hwang, who is the founder and portfolio manager of Tiger Asia Management and Tiger Asia Partners, carried out two trading schemes with Chinese bank stocks.
The US SEC alleged that Hwang and his firms committed insider trading when they sold short three Chinese bank stocks based on confidential information that they received in private placement offerings.
Hwang and his firms made $16.7 million in illicit profits, according to the US SEC.
Robert Khuzami, director of the US SEC’s division of enforcement, said: “Hwang today learned the painful lesson that illegal offshore trading is not off-limits from US law enforcement, and tomorrow’s would-be securities law violators would be well-advised to heed this warning.”
Sanjay Wadhwa, associate director of the US SEC’s New York regional office and deputy chief of the enforcement division’s market abuse unit, added: “Hwang betrayed his duty of confidentiality by trading ahead of the private placements, and betrayed his fiduciary obligations when he defrauded his investors by collecting fees earned from his attempted manipulation scheme.”
Raymond YH Park was also charged for his role in both schemes as the head trader of the two hedge funds that were involved, Tiger Asia Fund and Tiger Asia Overseas Fund.
Park also agreed to settle the US SEC’s charges.
The US Attorney’s Office for the District of New Jersey has also announced criminal charges against Tiger Asia Management.
NO FEE, NO RISK
100% ON RETURNS If you invest in only one securities finance news source this year, make sure it is your free subscription to Securities Finance Times
100% ON RETURNS If you invest in only one securities finance news source this year, make sure it is your free subscription to Securities Finance Times
