《SFC Enforcement Reporter》.pdfVIP

SFC Enforcement Reporter A monthly summary of SFC enforcement action April 2007 Highlights In March 2007, the SFC: ? sought disqualification orders against former directors of a failed listed company; ? petitioned for a winding-up order against a collapsed company; ? prosecuted four persons; and ? disciplined four licensees Invitation to improve the SFC Enforcement Reporter As mentioned in last month’s edition, the SFC is currently reviewing the SFC Enforcement Reporter and invites suggestions about what information you would like to see or what improvements can be made in future SFC Enforcement Reporters. Some suggestions have been received and the SFC welcomes further comments from the public. Feedback can be sent by email to: enfrerpoter@sfc.hk Marking the close Zero tolerance for “marking the close” Mr Chaw Chi Wai Ivan pleaded guilty to charges of creating a false or misleading appearance with respect to the market for VST Holdings Ltd and Man Sang International Ltd shares. Chaw placed orders at or near market close for shares in VST on 28 trading days, between 5 May and 26 August 2005, resulting in Chaw’s orders becoming the closing price on 26 of those days. On each of these occasions, the closing price was significantly higher than the prevailing market price. Further, between 11 and 31 August 2005, Chaw pursued a similar strategy on eight trading days in placing orders for Man Sang shares. Chaw was fined $10,000 and ordered to pay the SFC’s investigation costs. Press release issued on 9 March 2007 Placing orders at or near market close to fix or influence an artificial closing price is commonly called “marking the close”. It is a type of market manipulation and it is illegal under the SFO. It is one of the more easily detected forms of market misconduct. The SFC has a number of current investigations on foot involving ‘marking the