Hong Kong corruption watchdog arrests 8 in US$40m insider dealing probe

Hong Kong’s anti-corruption agency arrested eight people after it joined forces with the market watchdog to raid 14 locations – including two securities firms and a hedge fund – in a two-day operation as part of insider-dealing cases worth HK$315 million (US$40 million), the two agencies said in separate statements on Thursday.

The Independent Commission Against Corruption (ICAC) arrested six men and two women, aged between 35 and 60, including senior executives and a middleman, but did not identify them by name.

The brokerage Guotai Junan International Holdings said in a filing to the Hong Kong stock exchange on Thursday morning that one of its employees was detained by the ICAC after the agency joined hands with the Securities and Futures Commission (SFC) to raid the company’s office and seize certain documents on Tuesday.

Guotai Junan International, a subsidiary of Guotai Junan Securities, did not identify the staff member, but said that the person was not a member of the board. The company suspended the employee on Tuesday.

Citic Securities also confirmed in a filing on Thursday night that the SFC and ICAC searched the office of its Hong Kong subsidiary and seized some documents. The brokerage added that an employee was “enquired” by the ICAC.

The joint action, code-named “Fuse”, took place on Tuesday and Wednesday, targeting insider dealing and corruption, as teams from ICAC and SFC searched 14 locations, including the offices of three financial firms and the homes of those arrested.

“It is suspected that senior executives of the licensed securities firms had accepted bribes of over HK$4 million from the owner of the licensed hedge fund management firm for disclosing confidential information regarding share placements of various Hong Kong-listed companies before such information was publicly announced,” the SFC’s statement said.