Ex-BNP banker starts jail term

Hong Kong's first criminal prosecution for insider trading results in the ex-BNP Paribas banker and his girlfriend serving time in jail.

Ma Hon Yeung (Ma), former vice-president of BNP Paribas Capital Asia-Pacific, has been admitted to jail to serve a 26-month sentence for insider trading. Ma was found guilty of insider dealing three weeks ago and has also been sentenced to a fine of HK$230,000 ($29,677).

This is the first time any person has been sentenced to jail for insider trading in Hong Kong, according to the Securities and Futures Commission, and the first criminal prosecution under the Securities and Futures Ordinance since insider trading was made a criminal offence in Hong Kong in 2003. The maximum penalty for being found guilty of insider dealing is 10 years in jail and a fine of HK$10 million.

Ma's girlfriend, Ivy Lo Yuk Wah, was sentenced to 12-months imprisonment and fined HK$210,000.

Ma's three family members who were also found guilty of insider trading -- his brother Sammy Ma Hon Kit, his sister-in-law Cordelia Tso Kin Wah, and his nephew Ronald Ma Chun Ho -- got away without jail time. They were ordered to serve 200 hours of community service each and to pay fines of HK$330,000, HK$110,000 and HK$17,000 respectively.

The five defendants were convicted on a total of 12 insider dealing and insider dealing-related offences and the total fines are equivalent to the profits they made while dealing in Egana shares ahead of the company's privatisation. The court also ordered them to pay the SFC investigation costs totalling HK$322,742.

"Today's jail sentences are a significant milestone signalling the community's strongest condemnation of insider dealing. Insider dealing is a serious crime that will be punished severely, even for first-time offenders," says SFC chief executive officer Martin Wheatley in a written statement. "The message should now be loud and clear that insider dealers will go to jail."

Ma joined BNP Paribas as a vice-president in June 2006 and almost immediately started working on the proposed take-private of Egana Jewellery & Pearls. He tipped off his girlfriend as well as other family members to buy shares in Egana before the deal was announced in July 2006.

Between June and July 2006 Egana's shares traded between HK$1.35 and HK$1.61. The delisting offered shareholders an exit at HK$1.80 per share in cash or a stock swap. News of the delisting pushed the share price up to HK$1.84.

Ma left BNP two years ago. The French bank said it cannot comment on an ex-employee and was not involved in the prosecution.

The SFC filed a summons against the five at the end of January and commenced criminal proceedings in February. A court found Ma and the others guilty on March 11, but deferred sentencing until April 1.

The SFC said that this was the second out of five cases of insider trading it is currently pursuing.

¬ Haymarket Media Limited. All rights reserved.
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